Russia used OPEC’s reduction of oil output to increase its share on the market. As a result, Russia has become the world’s largest oil exporter for the first time since the collapse of the USSR, having left even Saudi Arabia behind, Bloomberg reports.
According to Russia’s Ministry for Energy, Russia exported 7.4 million barrels of oil and petroleum products daily during the second quarter of the year. Investors were expecting Russia to reduce its shipments after Prime Minister Putin and his deputy Igor Sechin stated in December of last year that they were ready to restrict production to maintain world prices on oil.
Instead, Russian oil companies received tax remissions on oil fields in Eastern Siberia, while the nation’s largest oil companies – Rosneft, Lukoil and TNK-BP increased their output after the prices had gone 54 percent up.
Saudi Arabia has recently decided to considerably reduce the national oil output: the standby capacity increased to 2.75 million barrels of oil a day. Last month, the level of output made up 8.04 million barrels a day taking into consideration OPEC’s quota for the nation – 8.051 million of barrels a day.
Russia’s extraction in August of this year increased by 1.3 percent in comparison with August of 2008 and made up 9.97 million barrels daily. The export gained 5.9 percent.
Russia’s active expansion to the market considerably diminishes the effect from OPEC’s actions aimed to reduce high oil reserves. In addition, many members of the cartel are not willing to strictly observe OPEC’s quotas against such a background.
When oil was traded at $40 per barrel in December of 2008, Russian PM Putin sent his deputy, Igor Sechin, to Algeria to participate in an OPEC meeting. Sechin said during the meeting that Russia had already reduced the export by 350,000 barrels a day and was prepared to make another reduction of 320,000 barrels if prices were not expected to grow.
However, Russia has not made any of the promised cuts. OPEC Secretary General Abdalla El-Badri stated later that he was very disappointed with Russia’s actions.