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Chart of the Day: The Biggest Surprise of 2023 is Russian Oil Production Resilience!

Figure (1)

Summary

Figure (1) above shows Russia’s total liquids production according to the EIA. It shows that on average, production declined by only 220 kb/d in 2023 relative to the average of 2022.

EOA’s Main Takeaway

Although estimates of Russia’s production vary from one organization to another, one fact is clear: the decline in production is far lower than most estimates. In our view, the reason for this  is a lack of understanding of the history of sanctions and their impact on markets.  

Russia was the biggest surprise for many, but not for us. Our readers are familiar with our thoughts since the beginning: the decline in production is limited, and the impact of sanctions is also limited. The price cap has no impact. Although we have the lowest decline estimate in the industry, we still overestimated the decline!