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Page added on January 2, 2015
Russia Pumps Most Oil Since Soviet Era With Sanctions Yet
Oil supplies in Iraq and Russia surged to the highest level in decades, signaling no respite in early 2015 from the glut that has pushed crude prices to their lowest in five years.
Russian oil production rose 0.3 percent in December to a post-Soviet record of 10.667 million barrels a day, according to preliminary data e-mailed today by CDU-TEK, part of the Energy Ministry. Iraq exported 2.94 million barrels a day in December, the most since the 1980s, said Oil Ministry spokesman Asim Jihad. The countries provided 15 percent of the world’s oil in November, according to theInternational Energy Agency.
Oil slumped 48 percent in London in 2014, the steepest decline since the 2008 financial crisis, as the Organization of Petroleum Exporting Countries refused to pare output in response to the highest U.S. oil production in three decades. Russian Energy Minister Alexander Novak, who met with some OPEC members in November, said the nation will maintain output this year and expects prices to stabilize.
“With the latest news from Russia and Iraq, the focus on rising supply remains a key negative driver for oil,” Ole Sloth Hansen, an analyst at Saxo Bank A/S in Copenhagen, said by e-mail. Brent crudefutures, at about $57 a barrel today, may slip below $50 this year, he said.
Russian output is increasing even after the U.S. and the European Union imposed sanctions last year in response to the country’s annexation of Crimea and what they say was support for separatists in eastern Ukraine. Measures included targeting the energy sector by banning exports to Russia of some equipment and technology. The country’s government gets about half of its revenue from oil and gas taxes.
Iraq Deal
Iraq, OPEC’s second-biggest producer, reached a deal with its semi-autonomous Kurdish region last month over the Kurds’ oil exports through Turkey, after years of disagreement on the territory’s right to independently develop its energy resources.
The agreement “looks to have had a positive effect on exports to the north,” analysts at consultants JBC Energy GmbH in Vienna said in a report today.
The agreement allows the shipment of as much as 550,000 barrels a day of oil from northern Iraq to the port of Ceyhan on the Mediterranean, along a pipeline to the Turkish border operated by the Kurdistan Regional Government. This includes 300,000 barrels a day from the Kirkuk oilfields in northern Iraq, under the control of Kurdish forces since they moved to repel an offensive by militants from the Islamic State in June.
Iraq exported 5.579 million barrels of Kirkuk oil in December, equivalent to about 180,000 barrels a day, Oil Ministry spokesman Jihad said by text message today. That’s more than a six-fold increase from 836,000 barrels in November, according to the Oil Ministry.
Russian Record
The Russian production figure is for crude and condensates, an ultralight oil that yields a greater proportion of high-value fuels. Production averaged 10.58 million barrels a day for 2014, also a post-Soviet record. Preliminary data, which didn’t reflect shipments by Gazprom Neft and may be revised, showed a decline in exports.
The previous post-Soviet oil production record was 10.64 million barrels a day in October, CDU-TEK data show. It rose above 11.4 million barrels a day in 1987, the Soviet-era peak, data from BP Plc show.
Brent crude, used to price about half of the world’s oil including Russia’s main export blend Urals, gained 0.5 percent today to $57.60 on the ICE Futures Europe exchange at 10:40 a.m. in London. It settled at $57.33 a barrel on Dec. 31, the lowest closing price since May 2009.
12 Comments on "Russia Pumps Most Oil Since Soviet Era With Sanctions Yet"
Ron Patterson on Fri, 2nd Jan 2015 10:04 am
There has always been about a 300 to 400 thousand barrels per day difference between what the Russian Energy Ministry reports for Russian oil production and what is reported by the EIA and JODI. But August and September that difference jumped to about half a million barrels per day.
CDU TEK shows Russian production continuing to increase in spite of sanctions and low oil prices. Does politics have anything t do with this? This Energy Ministry reporting I mean.
penury on Fri, 2nd Jan 2015 12:51 pm
Ron. as we all know .gov figures are always accurate and unpolitizied. Why just look at U.S. figures where wold we be without the ministry of truth and their weasonal(sic) adjustments.
Ron Patterson on Fri, 2nd Jan 2015 1:26 pm
Penury, some government sites are far more and accurate than others. Besides JODI is not a government site. But JODI for OPEC nations JODI just quotes the political numbers that are fed to them. But for Russia they do not… strange.
But for government sites some lie and some don’t. I believe Norway and even Mexico when they quote their production numbers. But not Venezuela or Iran. You must always look at their motives, that is why would they lie? If they have a strong motive to lie, then they usually do.
Speculawyer on Fri, 2nd Jan 2015 6:20 pm
Nice. Keep on pumping Russia. Sell us all your oil at these cheap prices. 🙂
Makati1 on Fri, 2nd Jan 2015 7:05 pm
Ron, that is like saying that this lie is not a big as that one, but they are both lies. There are NO real numbers coming out of any government/corporation/bank today. NONE!
That is what makes living now so exciting and adventurous. Simplifying your life and pulling out of the herd is your only path to sanity and freedom. Time is getting short…
Makati1 on Fri, 2nd Jan 2015 7:10 pm
Speculawyer, they have oil to burn, so to speak. Like when the US was selling it for $20 (inflation adjusted) in 1946. Considering the energy value, oil should sell for $10,000 or more per barrel. We have squandered away our one chance to a fantastic future. Today’s stupidity is the proof.
http://inflationdata.com/inflation/inflation_Rate/Historical_Oil_Prices_Table.asp
GregT on Fri, 2nd Jan 2015 7:23 pm
Spec,
Russia doesn’t have to sell her oil to us. Regardless of how badly we need it. 🙂
rockman on Fri, 2nd Jan 2015 8:18 pm
Spec – The US is one of the three big oil producers along with Russia and the KSA. We’re selling our oil cheap also. The big difference between us and Russia/KSA: They produce a lot more oil then they consume.
Dredd on Sat, 3rd Jan 2015 6:11 am
Petroleum Civilization needs to make some bucks to cover burial expenses.
Kenz300 on Sat, 3rd Jan 2015 11:40 am
Russia does not understand supply and demand…..
Sell more oil and drive down prices even more…..
KSA and OPEC will not cut back unless Russia, Iran, shale, tar sands and Deep water producers cut back.
Until then enjoy the lower prices……..
Makati1 on Sat, 3rd Jan 2015 6:45 pm
Kenz, Russia sells oil in USD (for now) but their exchange to Rubles makes the loss insignificant.
Oil $100 @ R34/$1 = R 3,400 (7-7-2014)
Oil $ 60 @ R58/$1 = R 3,480 (1-2-2015)
Since the costs to operate the system and the buying power of the people is in Rubles, the dollar number is NOT hurting Russia as much as TPTB/MSM want you to believe. It will only cut down on imports and that is a plus for Putin and Russia as it will force them to turn to internal production and to China.
turningpoint on Sat, 3rd Jan 2015 7:29 pm
Ron P.
Is that Darwinian?
As long as Russian oil continues to flow.
I’m sure Europeans will do all they can to keep Russian energy flowing. If that means softening their position on sanctions, then that’s what they’ll eventually do.
Oil is bought and sold on the world market, it doesn’t matter who buys Russian oil as long as it flows and it’s sold.
It’s just like adding money to the kitty. All that matters is that they add their money to the pot.