At present, Russia is working hard to consolidate its important position in the global energy market. According to the Kremlin’s official website, Russian President Vladimir Putin and Saudi Crown Prince Salman discussed coordination between the two countries in a phone call to ensure the stability of the global oil market, expressed appreciation for the efforts within the OPEC+ framework, and confirmed that they will continue to adhere to the current situation. There is a willingness to reach an agreement.
On Thursday, Russia announced its energy export draft for 2023-2025. According to the draft, Russia’s annual pipeline natural gas exports will drop by nearly 40% from 2023-2025. Although European countries have stopped most imports, Russia expects crude oil exports to increase slightly.
At the same time, on December 5 this year, the EU will officially embargo some Russian oil. Royal Bank of Canada has warned Europe to beware of Russia cutting oil supplies to Europe ahead of a formal EU embargo on its oil. The EU’s deliberate crackdown on Russian oil exports will also have the negative effect of tightening the market and pushing up oil prices.
Putin discusses stabilizing the oil market with Saudi Crown Prince, Nigeria’s oil minister: OPEC may be “forced” to further cut production
According to the Kremlin’s official website, Russian President Vladimir Putin had a phone call with Saudi Crown Prince Salman to discuss issues such as collaboration within the framework of the Shanghai Cooperation Organization and pointed out the rapid development of trade and economic relations between the two countries.
Putin and the Saudi crown prince also discussed coordination between the two countries to ensure the stability of global oil markets, expressed their appreciation for efforts within the OPEC+ framework and confirmed their willingness to continue to adhere to existing agreements.
Nigeria’s oil minister said on Friday that OPEC would be “forced” to cut production further if crude prices fell below current levels. He said: “Because we are now seeing oil prices affecting the budgets of some OPEC members. While OPEC+ still believes that supply and demand fundamentals support rising oil prices, crude oil prices continue to fall. It is not yet certain how to solve this problem, But the only tool available to us is to cut production when prices are too low.”
Since Putin announced partial mobilization, the EU has accelerated the process of agreeing on a resolution to impose a price ceiling on Russian oil. Representatives of member states will meet with the European Commission over the weekend to discuss new sanctions, sources said. In addition to a cap on oil prices, sanctions may include more restrictions on individuals and industries such as technology and luxury goods. But many details remain to be ironed out, including details such as what level the cap should be set at. Representatives of national governments to the EU will work to reach a preliminary agreement on price caps before EU leaders meet informally there on October 6. But one of the biggest uncertainties will be Hungary, which always rocks the boat whenever the EU needs the consent of all member states.
Russia announces oil and gas export draft, cutting natural gas exports by 40% in the next three years
Russia announced its energy export draft for 2023-2025 on Thursday. Pipeline natural gas exports will be further reduced, and Europe faces severe challenges.
According to the draft, Russia’s annual pipeline natural gas export volume will drop by nearly 40% from 2023 to 2025, to 125.2 billion cubic meters. Pipeline natural gas exports this year are estimated at 142 billion cubic meters.
The draft does not provide details on export markets. However, based on historical data and current flows, Turkey could become Gazprom’s single largest customer in Europe. Last year, Gazprom exported nearly 27 billion cubic meters of natural gas to Turkey.
According to forecasts, excluding the natural gas supplied to Asia and the former Soviet Union, approximately 45 billion cubic meters of natural gas can be transported to the European market, averaging 123 million cubic meters per day. Russia currently exports about 80 million cubic meters per day to Europe. These numbers are subject to change as Gazprom makes final decisions on supply based on market conditions, customer requirements and geopolitical tensions.
Russia expects a slight increase in crude oil exports, even as Europe halts most purchases from the country. The draft predicts that Russia will export 250 million tons of crude oil next year, higher than the 243 million tons delivered this year. It will export 255 million tons and 260 million tons respectively in 2024 and 2025.
However, the draft forecasts that shipments of petroleum products in 2023 will fall to 113 million tons from the 130 million tons expected this year.
Royal Bank of Canada: Watch out for Russia cutting oil supplies to Europe before EU formally embargoes its oil
Helima Croft, head of global commodity strategy at RBC Capital Markets, said it is still possible that Russian President Vladimir Putin will “surprise” and cut oil supplies to Europe, causing another crisis for the European economy. hit.
On Wednesday, Croft said: “Although the market’s attention has almost been absorbed by ‘Super Central Bank Week’, the risk of a sharp worsening of the European energy crisis cannot be underestimated.”
Croft warned that Russia may cut oil exports to Europe before the EU officially embargoes some Russian crude oil on December 5.
Oil exports are Russia’s main source of revenue, but supply cuts will also tighten global oil markets and raise prices, allowing Russia to make a killing.
Meanwhile, Russian seaborne oil exports fell to their lowest level in a year as Europe cut imports and Asian countries failed to fully fill the gap. Kpler data shows that in the first two weeks of September, Russian crude oil exports were 3.03 million barrels per day, a decrease of about 314,000 barrels per day from August.
As early as last month, Rystad Energy predicted that Russian seaborne oil exports would soon fall by more than 1 million barrels per day as demand in Asia weakens and the EU loosens its “embargo.”
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