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Russian Oil Exports Down Substantially
If evidence is needed that the Export Land Model works, Russia has provided it in spades. The report posted below notes that while production was down in the 1H08 by .8% compared with 1H07, exports suffered a decline of 5.2%. The implication is that Russian domestic demand ate up the difference between production and exports.
Of course, that is not necessarily so, as George (Gershwin) once noted. It could be that Russia simply built its own inventories for whatever (hoarding) reasons. Or it could be that what seems true is true, that they simply used the balance internally.
The Export Land Model highlights the arithmetic fact that if a country’s oil production is falling and its internal oil consumption is growing (which is the case in all oil exporting economies), exports will fall at a far greater rate than production falls.
Of course, the inverse can also be true. If an oil importing country (say the U.S.) begins to use less oil internally and if its oil production is also increasing, its imports will decline at a much faster rate than its production is rising. I don’t expect to see much of a rise in U.S. oil production, but there may be some given higher prices.
Here is the report from the Russian News and Information Agency:
Russia’s oil exports decline 5.2% to 897 mln bbls in 1H08
15:06
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19/ 08/ 2008
MOSCOW, August 19 (RIA Novosti) - Russia’s oil exports declined 5.2% year-on-year in January-June to 122.5 million metric tons (897 million barrels), the country’s top statistics body said on Tuesday.
According to the Russian State Statistics Service (Rosstat), oil accounted for 36.4% of Russian exports and 52.3% of fuel and energy product exports in January-June 2008.
Rosstat reported on Monday that oil output in Russia declined 0.8% year-on-year in January-July to 283 million metric tons (2.07 bln bbls).
Tags: peak oil energy investments
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5 responses so far ↓
1 paultaut // Aug 20, 2008 at 9:42 am
The same can be said for Mideast production increases vs actual exports.
Last year, an estimate was made that at its internal usage rate of increase, Iran would cease all exports within 5 years. (Don’t remember from whom)
Roaming everywhere without fear leaves one with memory lapses.
That’s what occurred in Indonesia, They still produce oil but no longer enough for exportation.
2 aja8888 // Aug 20, 2008 at 11:54 am
Isn’t Mexico also heading that way (declining exports)?
3 paultaut // Aug 20, 2008 at 2:16 pm
One of Mexico’s largest is quickly entering depletion possibly because of neglect but none the less, the decline is worth noteing.
There is an article a few postings down…Cantrell is the name.
4 paultaut // Aug 21, 2008 at 7:41 am
Regarding this week’s build in oil inventories, ignore it. Next weeks drop will be far larger than anticipated.
The problem/answer is one of logistics. Enroute Tankers will not enter the Gulf if storms are likely or present, either they stack up or go elsewhere. If they stack up, the EIA sometimes counts them in inventory even if they haven’t offloaded.
Fay is proving to be a highly unpredictable storm and is disrupting shipping more than anything else currently. But it has the potential to be sucked back into the Gulf and meld with another depression just west of it or out into the middle of the Gulf to strengthen anew.
Go to Accuweather.com, extreme weather, Atlantic and animate the Picture. You will also get a good view of everything brewing in the vicinity.
This is a graphic which has to be watched because of the off loading terminals in the Gulf and the Atlantic routes going to the Gulf.
Its not like these Big boys can turn let alone stop on a dime.
5 paultaut // Aug 22, 2008 at 2:08 am
Thats Extreme Weather, Hurricanes, then Atlantic.
If you want to see whats going on in the Pacific, ditto.
Remember the Airport scene in the first Die Hard movie where the Airport manager gives instructions regarding the planes overhead?
Rack em, Stack em.
Thats the kind of thing that occurs frequently during Hurricane Season.
Speaking of seasonalities, we are fast approaching the normal changeover from Gasoline Production to Heating Oil and the normal maintenance halt for refineries in general.
How far do you think Gasoline prices will drop before the “normal” seasonality occurs. Me, I’m hoping for sub $3.50 before we start getting reamed again.
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