BAKU, Azerbaijan, June 10. Pre-invasion forecast of Fitch Solutions for Russian oil production saw growth of 920,000b/d in 2022 but based on the emergence of a near total ban on oil imports and self-sanctioning by key importers and companies, the company now forecasts a contraction of 1.67mn b/d in 2022, Trend reports.
“There are supply-side upside triggers on the horizon, notably due to sharp forecast output declines in Russia. Russia could attempt to circumvent deepening international sanctions and the recent EU oil embargo by directing more of its shipments eastwards. Though there are more structural issues Moscow must navigate in that its domestic production is forecast to decline sharply in the coming quarters,” reads the latest report by Fitch Solutions.
Indeed, there are reports that new oil deals with India firms have been put on hold, due to production being insufficient.
“China, Bangladesh, Indonesia and Sri Lanka represent other potential outlets for eastward Russian crude shipments moving forward, but apart from China, others have mostly baulked at high sanctions risks or offer limited market size to help offset the loss in exports to the EU. The swing of nearly 2.59mn b/d in Russia’s production has removed a significant portion of global oil production growth we had anticipated at the start of the year. However, it has only moderated our expected oversupply for the year, as we now expect lower global demand growth and strong production growth from both non-OPEC and OPEC members in the second half of the year to challenge upward price momentum,” the company said.