According to the proposed budget for the next three years, Russia’s finance ministry has drastically reduced forecasts for taxable oil production for 2023 in anticipation that Western sanctions will result in a general decrease in output and processing volumes.
Russian oil and gas condensate production is projected to reach 490 million tonnes in 2023 (9.84 million barrels per day (bpd)), down from the 525–530 million tonnes predicted for this year by 7%–8%. (10.54 million bpd – 10.64 million bpd).
Since Soviet geologists discovered reserves in the wetlands of Siberia in the decades following World War Two, selling oil and gas has been one of the key sources of foreign currency gains for Russia.
An analysis by Reuters based on the disclosed budget forecasts for excise duty and revenue from oil refining and exports suggests that the decline may be substantially greater.
Refining volumes were reduced by 56 million tonnes, or nearly 20%, to 230.1 million tonnes from the earlier prediction of 286.1 million tonnes.
According to budget statistics, the amount of oil that will be refined and exported that would be subject to taxes in 2023 has been reduced from 507.2 million tonnes to 408.2 million tonnes (8.20 million bpd) (10.15 million bpd).
178.2 million tonnes of oil shipments that are subject to export duties are anticipated, which is a 19.4% decrease from earlier estimates.
The finance ministry said in comments to Reuters that it based its calculations on the economics ministry’s forecasts of exports and other factors.
According to the statement, “the economy ministry’s prediction is based on an increase in overall oil exports, including an increase in exports eligible for tax relief, which is connected to an anticipated increase in production at fields that enjoy export duty relief.” The anticipated trajectory of Russia’s oil output has been revised, according to an addition to the draught budget that parliament must adopt. This modification was caused by a number of nations’ refusal to work with Russia in the oil industry and a discount on sales of Russia’s key exports.
The projection was lowered to 515 million tonnes for 2022 and to 490 million tonnes for 2023. The oil production will average 500 million tonnes in 2024 and 2025, according to the report. The third-largest oil producer behind the United States and Saudi Arabia, Russia, has so far withstood sanctions because to increasing shipments to China and India.
- Russia’s Finance Ministry lowers its forecast for taxable oil in 2023
- Check all news and articles from the latest Business news updates.