RUSSIA $50 Billion Oil Disaster as OPEC+ Extends Production Cuts to 2025 as Oil prices Fall Again

Video Summary

The Organization of the Petroleum Exporting Countries (OPEC) has announced that it will extend its oil production cuts until 2025, which will have a major impact on Russia’s oil income. Russia is a member of OPEC+, which consists of 23 oil-producing countries that collaborate to manage oil production and prices. OPEC+ has cut its production by 3.7 million barrels per day, which is equivalent to about 60% of global production.

Prior to Russia’s invasion of Ukraine, Russia was earning around $250 million per day from the sale of oil products. However, over the past two years, its revenue has decreased, and it is now earning around $175 million per day. This represents a loss of $55 million per day, or around $20 billion annually. The value of Russian oil sales has also been negatively affected by the price cap imposed by the US and other countries, which has reduced the price of Russian oil to around $67 per barrel, down from over $100 per barrel in 2022.

The cuts to Russian oil production will also have a knock-on effect on its refining business, which is a significant employer in the country. Russia’s exports of refined oil products, such as gasoline and diesel, have also reduced by around 30% compared to pre-invasion levels.

The extension of OPEC+ production cuts will lead to a loss of around $50 billion per year for Russia, which will exacerbate its economic challenges. The Russian government is under pressure to fund its war in Ukraine, which has resulted in significant losses. The country is also struggling to maintain its oil production levels due to the exodus of foreign companies and the loss of technical expertise and technology. The production cuts will likely have long-term implications for Russia’s oil industry, making it difficult for the country to return to its pre-invasion production levels.

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