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Sunday, September 23, 2018

Expectations for growth in Russian oil supplies too optimistic

The Financial Times says that oil supplies from Russia will fall short of expectations over the next four years, adding to the supply concerns that have driven world oil prices to record highs this week. 

Claude Mandil, Executive Director of the International Energy Agency, told the Financial Times that expectations for growth in Russian oil supplies were too optimistic and that the Organisation of the Petroleum Exporting Countries (OPEC) would have to make up the difference.  

He said, "To 2010, OPEC would have to fill a higher gap than is being forecast. I am not sure that non-OPEC supply will be that high - and I mainly have in mind Russia but also some other non-OPEC suppliers".  

Europe needed to do more to curb its oil and gas demand in light of the increasing fears over supply, Claude Mandil said. "One of the most important ways to increase energy security is through energy efficiency and the market signals for that are not big enough".  

"I don’t think goals and targets in shares of renewables or in decreasing energy consumption is a useful tool. We think the [European] Commission could be bolder on norms and standards. It’s within its responsibility," Mr Mandil said. 

Analysts have in the past year reduced their growth estimates by half. Russia is thought likely to supply at best 180,000 barrels of production growth this year, compared with the IEA estimate of Russian growth of more than 300,000 barrels a day, one senior supply analyst said. 

Contact: Erik Ranheim