Russia Raises July Oil Output Due To Refineries Ramp Up

Russia Raises July Oil Output Due To Refineries Ramp Up
The recovery in Russian oil production has continued this month as higher domestic demand offset a slight drop in exports to key markets.

The recovery in Russian oil production has continued this month as higher domestic demand offset a slight drop in exports to key markets.

The nation’s producers pumped 10.78 million barrels a day on average from July 1 to 17, according to data from the Energy Ministry’s CDU-TEK unit that was seen by Bloomberg. That’s 0.6% above the June level, according to calculations based on the data, indicating that the pace of the country’s output recovery has slowed.

Russia’s oil production is recovering for a third consecutive month despite unprecedented sanctions imposed by the West after the invasion of Ukraine. The initial output disruption contributed to a 50% jump in crude prices in the first half of the year, pushing global inflation higher and threatening recession. To ease fuel costs, the US has been seeking additional crude from Saudi Arabia, Moscow’s key partner in the OPEC+ alliance.

Russia’s production growth came as the country’s refineries increased runs after adapting to Western sanctions. Supplies to domestic downstream facilities so far in July reached 5.75 million barrels a day, around 6% above the average for June, the data show.

The country’s deliveries to main foreign markets via key pipelines and port facilities operated by Transneft PJSC so far in July dropped nearly 4% to 4.33 million barrels per day.

Oil watchers are following Russia’s output recovery with an eye on whether the nation could support further increases in OPEC+ quotas at the group’s next meeting on Aug. 3. After President Joe Biden’s visit to Saudi Arabia last week, the kingdom’s ministers said any oil policy decisions would be taken within the framework of the producers’ alliance.



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