Russia cuts forecast for 2021-2022 crude oil production

According to the latest amendments to the Russian government's energy development plan, Russia has drastically cut its forecasts for domestic crude oil, natural gas and coal production in 2021 and 2022.

According to the latest forecast of the Russian government, this year's oil production will reach 517 million tons, lower than the previous forecast of 560 million tons.

Russia’s oil production forecast for 2022 has also been revised down to 548 million tons, which is lower than the earlier estimate of 558 million tons.

In addition, forecasts for natural gas production and coal production have also been revised down, lower than previous forecasts.

According to documents approved by the government, estimates of oil production in 2023 and 2024 remain unchanged.

However, the Russian government's forecast of liquefied natural gas (LNG) production is consistent with previous forecasts, and the production of LNG in 2021 is expected to be 30.1 million tons.

Last month, the Russian government approved a long-term development plan for LNG. It is estimated that by 2035, production capacity will triple from current levels to 140 million tons per year.

Russian Prime Minister Mikhail Mishustin said in March this year that Russia also plans to increase LNG exports in consideration of the continued growth in global LNG demand and trade.

Nevertheless, the decline in oil production forecasts for this year and next may partly reflect the ongoing OPEC+ production reduction agreement.

Since the beginning of this year, Russia has been fighting for concessions from the Organization of Petroleum Exporting Countries (OPEC) because Russia’s oil production has increased slightly every month. In April, Russia was allowed to increase its output by 130,000 barrels per day, while other members of the OPEC+ alliance were required to keep their output flat.

Even after the planned production cut agreement expires in May, Russia will still be part of the OPEC+ agreement. According to the current situation, Russia will still cut its combined oil by about 5 million barrels per day by July.