Russia's second-largest oil producer Lukoil could cut crude production by 20% to 30% without a drastic loss of revenue, its vice president in charge of strategic development suggested on Monday
MOSCOW (Pakistan Point News / Sputnik - 30th May, 2022) Russia's second-largest oil producer Lukoil could cut crude production by 20% to 30% without a drastic loss of revenue, its vice president in charge of strategic development suggested on Monday.
"Why should Russia produce 10 million barrels of oil per day (mb/d) if we can effectively consume and export 7-8 mb/d without hurting the budget, domestic consumption and export?" Leonid Fedun said in an op-ed for the RBC daily.
Fedun said Russia did not need to maintain output at the pre-crisis level only to be forced to make discounts of up to 40%. Excess reserves should remain untapped for future consumption, he argued.
Energy prices soared last year after the global demand soared on the back of post-pandemic recovery. Reports of an oil embargo that Europe hopes to agree to counter Russia have heated up the market even more.
The OPEC group of the world's largest oil producers could make up the shortfall from Russian oil to some extent, Fedun said.
Russia and OPEC have had output cuts in place since 2020. They have been ramping up production since August and will revise production curbs in June.
"It is extremely important to maintain the OPEC+ agreement amid this political storm. Only Arab producers have free capacities to partially replace Russian oil in the short term," he said.
Russia could scale up production after completing its Asia pivot, Fedun suggested. He said Russia needs to build up its sea-river tanker fleet to explore waterway export routes in Iran, Turkey and Central Asia.
