RUSSIAN OIL PRODUCTION: NO CHANGES

BLOOMBERG - Apr 14, 2025 - Russia’s new long-term energy strategy sees crude-oil production and exports barely changing over the next 25 years.

Its target scenario sees output of 540 million tons at the end of this decade and also by midcentury, a document published Monday showed. That’s equivalent to about 10.84 million barrels a day and is only marginally above volumes in 2023, the baseline for the paper. Shipments abroad are also expected to hold steady.

The modest outlook reflects an expectation for tougher competition from other major fossil-fuel producers and diminishing global demand beyond 2035. The strategy also notes a gradual depletion of high-quality hydrocarbon reserves in Russia and a growing share of more expensive, hard-to-recover resources.

 Accounting for roughly 10% of global crude output, Russia wields significant market clout. It’s a major supplier to India and China and a core member of OPEC+. Stagnating exports may undermine that influence, while any long-term slowdown would also deprive the Russian budget of important revenue, directly affecting Moscow’s ability to meet spending commitments.

Gas Strategy

Unlike oil, the country’s natural gas strategy foresees a big hike in annual production. It targets 853 billion cubic meters by the end of the decade, up by more than a third from 2023. Output in 2050 is seen topping 1 trillion cubic meters, an increase that’s largely down to a ramp-up of liquefied natural gas.

 Russia aims to raise LNG output by starting four more plants this decade, in addition to those already operating on Sakhalin Island and the Yamal Peninsula. It also plans to expand the Arctic LNG 2 facility, and targets total 2030 capacity of 105 million tons a year from all projects combined.

Western sanctions currently stand in the way of that ambition. The four future projects are all blacklisted by the US, while Arctic LNG 2 has shuttered operations as the restrictions prevent it from marketing and shipping cargoes.

The US administration hasn’t signaled whether it’d be willing to lift any curbs — or toughen them — amid peace talks aimed at ending the war in Ukraine. Treasury Secretary Scott Bessent in late March said all options were on the table and would be determined by the “Russian leadership’s next moves.”

Russia’s target scenario for gas also envisions an almost twofold jump in piped-gas exports to 197 billion cubic meters by 2036. Yet even if this goal is reached, flows would still not exceed the record set in 2018, before the full-scale invasion of Ukraine.

Russia was once the single-largest piped-gas supplier in the world, but lost almost all buyers in Europe following the outbreak of war. With only one pipeline route to the European Union now available, and talks on a second Power of Siberia link to China stalled, Gazprom PJSC doesn’t currently have the means to break its prewar record.

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