oil field
A gas torch is seen next to the Lukoil company sign at the Filanovskogo oil platform in the Caspian Sea, Russia. Image Credit: Reuters

Dubai: Russia, which is part of the Opec plus agreement along with Saudi Arabia, said on Wednesday it produced record oil in 2018, with analysts saying that the country may keep its production steady for sometime.

Russia produced 11.16 million barrels of oil per day in 2018, data from the ministry of energy showed, as it breached the average 11 mbpd per month, making it a record. This compares with 2017 production figure of 10.98. mbpd, and the previous record of 11.42 million bpd seen in 1987.

“Russia continued to increase production right up until beginning of the new deal to cut production. It shows how Russia, despite the price collapse since October has been in no hurry to signal cuts to support the price,” Ole Hansen, head of commodity strategy at Saxo Bank told Gulf News.

Russia is expected to play its part in the Opec plus deal and cut production by the agreed 230,000 bpd from October’s output of 11.4 million bpd. This will still keep Russian production above the record 11.1 million bpd achieved in 2018, Hansen said.

Russia’s energy minister Alexander Novak expects steady production in 2019. Unlike his counterparts in Opec, Novak currently sees no need to extend or deepen the agreed cuts, saying the effects of the deal on market balance will be visible as soon as January or February.

“Failure to halt the current price slide is likely to force additional cuts. Such action is likely to fall on the shoulders of those Opec producers who raised production by the most between June and November, ie. Saudi Arabia, UAE and to a certain extent Kuwait,” Hansen said.

Due to the difficulty of cutting production the decline to the stated level from Russia is likely to take a few months. They will then hold production steady until the second half and potentially beyond should the price of crude oil, due to demand concerns, fail to stabilise, Hansen added.