Russia Ramps Up Oil Exports as OPEC Cuts Back
Source: Bloomberg (9/8/09)
"In no uncertain terms, Russia has been the biggest beneficiary of OPEC's sacrifice."
Exports of crude oil and refined products from Russia rose to 7.4 million barrels a day in the second quarter, from 7.25 million in the first quarter, according to Energy Ministry data. Saudi shipments fell to about 7 million barrels a day, from 7.39 million, according to International Energy Agency estimates of output and domestic demand.
Investors had expected Russian supplies to decline this year after Mr. Putin's deputy, Igor Sechin, told the Organization of the Petroleum Exporting Countries in December that his government was ready to limit production to support prices. Instead, Russia is providing tax breaks for new fields in Siberia. Rosneft, Lukoil and BP's Russian venture, TNK-BP, all pumped more as prices rose 54%, to near $69 a barrel.
"In no uncertain terms, Russia has been the biggest beneficiary of OPEC's sacrifice," Chris Weafer, chief strategist at UralSib Financial, said during an interview in Moscow. "Higher prices have equaled a $20 billion tax windfall."
The extra barrels may undermine OPEC efforts to reduce inventories and keep members from exceeding their quotas.