Russia’s Economy Forecasts Revised Up

By Darya Korsunskaya

(Reuters) – Russia’s economy ministry has revised its 2024 forecasts for oil and gas export sales by $17.4 billion, raising it to $239.7 billion due to improved price expectations, according to a document seen by Reuters.

The positive outlook for Russia’s oil and gas sector shows how Western sanctions have struggled to significantly impact the Russian economy amid the ongoing war with Ukraine.

The document indicates that Russian crude oil exports are projected to rise to 239.9 million metric tons (or 4.8 million barrels per day) in 2024, up from 238.3 million tons in 2023.

The ministry also revised the average export price of Russian oil to $70 per barrel, a $5 increase from earlier projections. This marks an increase from $64.5 in 2023 and is above the West’s imposed price cap of $60.

Natural gas prices for sales to Europe and China have also been revised upward. Since the invasion of Ukraine, Russia has shifted much of its trade focus toward China and India.

The new estimates imply higher revenues, with nearly $240 billion expected from oil and gas exports this year, representing a $13 billion increase from 2023. Forecasts for 2025 revenue have also been raised to $236.5 billion.

Oil Output Decline

Russian President Vladimir Putin stated that the global economy would struggle without Russia’s oil and gas. During an economic forum in Russia’s Far East, he confirmed Russia’s intent to continue gas exports through Ukraine to the EU but acknowledged the uncertainty of maintaining the transit agreement set to expire at year-end.

Annual gas output is expected to rise until 2030, according to current forecasts, but expectations for both oil production and total energy exports have been downgraded.

In cooperation with OPEC and its allies, Russia is working to limit oil output to stabilize the market. Updated estimates indicate Russian oil production is expected to fall to 521.3 million tons this year, down from 529.6 million tons in 2023 and a reduction of 1.7 million tons from the prior estimate.

Forecasts for oil production in 2025 have also been downgraded, projecting further declines to 518.6 million tons, representing an 11.4 million ton reduction from previous expectations.