- Russia produced about 11 million barrels of crude oil a day before it invaded Ukraine.
- It exported 7 million barrels of its daily production.
- Sweeping sanctions have forced Russia to cut its daily output by 1 million barrels.
Sanctions against Russia have knocked 1 million barrels of crude oil off its production each day — but that’s just a “drop in the ocean compared to the intended impact,” according to Mike Muller, the Asia head of Vitol, the world’s biggest independent crude trader.
Russia was producing about 11 million barrels of crude oil a day until it invaded Ukraine in late February. Of that, it exported about 7 million barrels a day. But sweeping sanctions and boycotts of its products have disrupted trade and cut demand, forcing Russia to cut its supply. The European Union is also planning a total ban on Russian crude.
“If only one million barrels per day of that has gone missing so far, before the EU shuts the door on Russia crude — if, they indeed succeed in getting unanimity over there — that’s indeed not the intended consequence of sanctions,” Muller told Dubai-based Gulf Intelligence, an energy trade podcast. Vitol said last month it would stop trading Russian oil by the end of 2022.
Russia made $66 billion from fossil fuel exports in the two months since it invaded Ukraine, according to a report by the Centre for Research on Energy and Clean Air released last week. The revenue was about half the $147 billion it recorded for the whole of 2021 as energy prices have surged this year.
There are still many countries in Asia, Africa, and Latin America that have not imposed sanctions against Russia, Muller said in the podcast.
“Many, many pieces of the world economy are sitting on the fence — and notably the two biggest countries population-wise in the world are continuing to find ways of accessing Russian oil,” he said, referring to China and India.
Despite the appearance of resilience, Russia’s energy sector is likely to come under further stress as the European Union plans to ban oil from the country. S&P Global expects Russia’s crude oil output to face “peak disruptions” in August, falling by about 2.8 million barrels a day.