RIGA - Russia is surpassing Saudi Arabia in oil exports for the first time since the Soviet Union's collapse, as Prime Minister Vladimir Putin exploits OPEC production cuts in a bid to gain market share, reports Bloomberg. Exports of crude and refined products rose to about 7.4 million barrels a day in the second quarter, reports Energy Ministry data. Saudi shipments fell to about 7 million barrels a day, say International Energy Agency estimates.
Investors expected Russian supplies to decline this year after Putin's deputy, Igor Sechin, told OPEC in December that his government was ready to limit production to support prices. Instead, Russia is now providing tax breaks for new fields in Siberia.
"In no uncertain terms, Russia has been the biggest beneficiary of OPEC's sacrifice," said chief strategist at UralSib Financial Corp., Chris Weafer. Russia already exports more energy than any other country, when shipments of natural gas from state-run OAO Gazprom are included.
"OPEC-Russia cooperation is just useful theater for both sides," said Center of Strategic and International Studies analyst Edward Chow, in Washington. "OPEC folks are pretty savvy and cynical about Russia's duplicitous behavior, which started in Soviet times."
Whether Russia can sustain the gain "is a question of considerable controversy," LCM's Morse said. "I'm of the opinion that Russian production is going to grow."
