Russia is experiencing a sharp drop in oil production.

Russia is experiencing a sharp drop in oil production.
Photo by Zbynek Burival / Unsplash

During the two weeks of April, oil production in Russia dropped by 7.4%, or 810 thousand barrels per day.
The decline has been gradually increasing: by April 4, it was about 450 thousand barrels a day, and 10 days later it had doubled: 10.2 million barrels a day remained out of 11.01 million.

Oil companies are forced to kill the wells because of the sharp decline in demand for Russian Urals, which has become "toxic" in the eyes of buyers, traders and transporters and is sold at a record discount of $35 per barrel.

It is not yet possible to say that the production decline is over. Rather, it is a reaction to the refusal by Shell, BP, Eni and TotalEnergies to buy Russian oil. It has already been declared that in May the 15 largest world traders reduce or refuse to buy Russian oil.

The IEA supposes that Russia will lose about one third of oil production. The reduction will amount to about 3 mln. barrels of oil a day; by the summer 22 the oil industry will be back to the level of 2004.

In the event of an embargo on hydrocarbons from Russia, which is being developed by the EU, meaning a phased ban on their imports, the fall could continue and reach half of the current level. In this case, production will collapse to the level of the nineties.