Oil production and refining in the Russian Federation
The dynamics seen in global oil prices and demand are the primary factor influencing oil production volumes in Russia. Domestic demand for petroleum products plays a secondary role. The mostly favourable situation on global raw commodity markets has contributed to growth in oil production in the Russian Federation over the last few years. Despite the decline in prices, oil production in the Russian Federation increased in 2015.
Despite steady growth in production, crude oil exports from the Russian Federation have not changed significantly over the last ten years. This can be attributed to growth in oil refining, which was supported by tax incentives, among other things.
Petroleum product exports from Russia have increased significantly in recent years and these positive dynamics continued in 2015.
Russia reduced primary oil refining volumes in 2015 as the production and export of crude oil increased. This resulted from the cumulative impact of lower petroleum product prices and a tax manoeuver that diminished the appeal of exporting dark petroleum products. Fuel oil production saw the sharpest decline, while growth was seen in the volume of petrol production.
Just like the rest of the world, the dynamics in demand for petroleum products within the country is above all determined by the number of passenger cars. Increased car ownership has kept up demand for petroleum products in the Russian Federation in recent years. Economic difficulties led to a decline in domestic petrol and diesel consumption in 2015, yet the number of vehicles in the country continued to expand.