Opec: Russia becomes top crude producer, KSA in second place

Russia has become the world’s biggest crude producer, according to statistics recently published by the oil cartel Opec.

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By  Nicholas Wilson Published  September 5, 2006

Russia has become the world’s biggest crude producer, according to statistics recently published by the oil cartel Opec. Previously, Russia has passed Saudi Arabia as the number one producer, globally from time to time in the past four years, but has mainly been in second position. The latest figures, however, show that Russian production spikes are no no longer one-offs and that Moscow really does sit in the top spot. Opec statistics show that 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 tonnes, a year-on-year boost of 2.3%. Traditionally, Saudi Arabia has been regarded as the world’s undisputed primary source of conventional oil, with Russia in second place. But in recent years Russia has re-nationalised and modernised much of its industry and that policy now appears to be paying off. Saudi Arabia is known as “the world’s central bank of oil” due to its ability to access spare capacity and raise production at short notice. However, at a time of record prices and an inability of Opec to demonstrate that it calls the shots like it used to, analysts are wondering if Saudi Arabia still has the control it once had. Former director of Oxford Institute for Energy Studies Bob Skinner said: “Opec wants price stability and it’s good to have other players to call on in the event that Opec players don’t have the spare capacity in the event of a crisis.” Russia’s “toppling” of the Saudis was celebrated by Russia’s media. The Komsomolskaya Pravda daily newspaper ran a story headlined “Russia takes first place in petroleum output rankings”. However, with oil prices hovering above US $70 a barrel because of uncertainty over Iranian supplies, global geopolitics and BP’s pipeline crisis in Alaska, Russia may be 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% a year between now and 2009. Furthermore, there are also fears that Russia is becoming too addicted to what its politicians and media call “the oil needle”. Money from oil and gas accounts for 52.2% of all revenues to the state treasury and more than 35% of Russia’s exports.

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