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Russia’s Crude Oil Production Hits Record: What’s Next?


Nov. 20 2020, Updated 3:21 p.m. ET

Russia’s crude oil production 

Russia’s crude oil production rose by 2,000 bpd (barrels per day) to 11.23 MMbpd (million barrels per day) in November 2016 compared to the previous month, according to Russia’s deputy energy minister, Kirill Molodtsov. Production in Russia rose 0.2% month-over-month to the highest level since 1988. Russia’s crude oil production peaked at 11.41 MMbpd during the Soviet Era in 1988. Russia has been the world’s top crude oil producer for the tenth consecutive year. Record production from Russia could pressure crude oil prices.

The latest figures from the EIA (U.S. Energy Information Administration) reported that Russia’s crude oil and other liquid production was at 11.44 MMbpd in October 2016.

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Russia’s crude oil production estimates  

The EIA estimates that Russia’s crude oil and other liquid production will average 11.39 MMbpd in 2017. UBS estimates that Russia’s crude oil production will rise in 2017. The Russian Ministry of Energy estimates that Russia’s crude oil production will average 10.92 MMbpd in 2016, the highest level in the last 30 years.

However, the International Energy Agency expects Russia’s production to fall due to inadequate pipeline infrastructure.

Russia and OPEC

OPEC (Organization of the Petroleum Exporting Countries) and Russia were major players in the recent production cut deal. For more, read part one of the series. Also read, Will Non-OPEC Producers Support the Crude Oil Bulls?

Impact on crude oil prices, stocks, and ETFs

Changes in crude oil supplies could impact crude oil prices. Volatility in crude oil prices impacts the earnings of crude oil and gas producers like Marathon Oil (MRO), ConocoPhillips (COP), Denbury Resources (DNR), Stone Energy (SGY), and Sanchez Energy (SN).

Moves in crude oil and natural gas prices also impact funds such as the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), the ProShares UltraShort Bloomberg Crude Oil (SCO), the Fidelity MSCI Energy ETF (FENY), the United States Oil ETF (USO), the ProShares Ultra Bloomberg Crude Oil (UCO), the ProShares Ultra Oil & Gas (DIG), the Energy Select Sector SPDR (XLE), the iShares Global Energy (IXC), and the iShares US Oil Equipment & Services ETF (IEZ).

In the next part of this series, we’ll take a look at Libya’s crude oil production and its impact on the crude oil market.


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