MOSCOW, April 19. /TASS/. The decline in oil and gas condensate production in Russia in 2023 should be less than 3% year on year because companies managed to successfully redirect oil exports to Asia and arrange sales of petroleum products, Kirill Bakhtin from Sinara investment bank said in his op-ed posted by the InfoTEK analytical center.

Oil and gas condensate production had an uptick by 2% in annual terms and reached 535 mln metric tons. "It remained stable in January - February [2023], contrary to external restrictions from the side of the EU and the G7. Gloomy forecasts of oil production dynamics in Russia made by foreign energy agencies in spring 2022 did not match the reality. Considering the contraction of production by 5% from March, we anticipate it will decline by less than 3% YOY in 2023," the analyst said.

The process of redirecting oil supplies "was painless for the sector because the feedstock now finds buyers in Asia (80% of sales)," he noted.

"India at the same time has become the top buyer, if we factor in seaborne shipments alone. All the credit of the top buyer in Europe passed to Bulgaria, whose share accounts for just 4% of exports from Russia and which had received the right from the European Union to continue imports from Russia until the end of 2024. Refusal of Germany and Poland to take Russian oil since 2023, which caused a drop in supplies via the Druzhba [oil pipeline] early this year, was full offset as part of the Transneft system by an increase in exports via Baltic ports and Kozmino [port] in the Far East," the export added.

Preliminary statistics of the first quarter does not show a decline in production and exports of petroleum products, Bakhtin said. "It means the voluntary contraction of production covers less profitable crude oil export but not the refining and sales segments," the expert noted. "It can be confidently stated that exports of petroleum products have adapted to external challenges and [did so] even better than many market players expected," he stressed.

Russia made earlier the decision to voluntarily reduce oil production since March 2023 until the end of 2023 by 500,000 barrels per day.