Statistics recently published by the oil cartel OPEC show that Russia is currently extracting more oil than Saudi Arabia, making it the biggest producer of “black gold”? in the world, the British Financial Times reported on Wednesday, Aug. 23.
OPEC statistics show that in the period since 2002 Russian companies have surpassed the Saudis as the world’s biggest oil producers on an on-and-off basis. The latest figures, however, have been hailed in Russia as evidence that such periodic production spikes are no one-offs and that Moscow really does have a right to lay claim to the number one spot.
According to OPEC, in June 2006 Russia extracted 9.236 million barrels of oil, which is 46,000 barrels more than Saudi Arabia. The statistics also showed that Russian production in the first half of this year increased to 235.8 million tons, a year-on-year improvement of 2.3 percent.
Traditionally, Saudi Arabia has been regarded as the world’s undisputed primary source of oil and Russia has had to settle for second place. But in recent years Russia has re-nationalized and modernized much of its industry and that policy now appears to be paying off.
Even Russian analysts concede that Moscow’s cause is helped by the fact that Saudi Arabia is subject to OPEC output restrictions.
The Saudis are famous for their ability to access spare capacity and raise production at short notice and if they really wanted to reassert their leadership role the feeling is they could do so easily.
Unconcerned by such “details”?, Russia’s “toppling”? of the Saudis was welcomed domestically on Tuesday, Aug. 22. The populist Komsomolskaya Pravda daily newspaper ran a story headlined “Russia takes first place in oil output rankings”?.
With oil prices hovering above $70 a barrel for London Brent crude because of uncertainty over Iranian supplies and BP’s pipeline crisis in Alaska, Russia is enjoying an unprecedented bonanza. But analysts say its oil industry is already working close to capacity and that it will be able to manage output increases of up to only 2 percent a year between now and 2009.
There are also fears that Russia is becoming too addicted to what politicians call “the oil needle”?, and is doing too little to develop future revenue streams. Money from oil and gas accounts for 52.2 percent of all revenues to the state treasury and more than 35 percent of Russia’s exports.
Such riches can make a country complacent, according to Alexei Kudrin, the Russian Finance Minister. “At present, we are in a dangerously carefree zone,”? he said recently.