Russia’s crude oil production is set to decline in 2022 if oil prices remain below $35 per barrel from the failure of Russia and OPEC countries agreeing measures to further curb oil production, according to the vice president of Russian energy company Lukoil on Thursday.
Speaking in an interview with Russia’s RBC TV, Leonid Fedun described the decline in crude oil prices, which fell below $25 a barrel late on Wednesday for the first time in 17 years, as “catastrophic.”
Fedun depicted the standoff between Moscow and Riyadh as a “war of attrition” and said if the OPEC+ deal had not collapsed on March 6, “then a barrel of oil would now cost about $50.”
Due to the stalemate resulting from the deal collapse, he said Russia and Saudi Arabia would be placed in a negative situation while the winning side in this "war of attrition" would be the U.S.
The U.S. ranks as one of the top oil consumers since 1965 and a world leader in gas consumption since 1985.
Fedun also warned that the Ruble exchange rate would fall, with the likelihood that the real income of Russians would decline.
“If Russia and OPEC countries fail to agree on a new agreement to reduce production and oil prices remain in the range of no more than $35 per barrel, then from 2022-2023, production in Russia will begin to decline,” he concluded.
Reporting By E. Gurkan Abay in Moscow
Writing By Sibel Morrow