Russian firms have encountered problems in securing financing for April contracts to sell crude and oil products, but the situation can be resolved, Deputy Prime Minister Alexander Novak was quoted as saying by the Interfax news agency on Thursday.
The United States banned imports of Moscow’s oil and gas on Tuesday, while some Western oil companies, such as Shell , have said they will stop buying Russian oil.
Western sanctions haven’t had an impact on Russia’s oil production yet, as the latest data showed its output rising by 55,000 barrels per day (bpd) to 11.1 million bpd in March from February, daily Kommersant reported, citing data from the energy ministry.
Output from Russia’s largest producer, Rosneft, stood at 3.4 million bpd, excluding Bashneft, Lukoil’s output was at 1.6 million bpd, Surgutneftegaz’s at 1.2 million bpd and Gazprom Neft’s at 0.8 million bpd, the data seen by the daily showed.
While total production rose, with Gazprom Neft contributing four-fifths of the increase, some Russian producers have faced problems selling their cargoes, Kommersant said.
Analysts at Oslo-based Rystad Energy said Russia might be forced to start shutting down its crude oil production if the embargo widens, as it had to do in April 2020, when global demand crashed due to COVID-19 pandemic.
“Russia doesn’t have robust storage inventory capacity... there is nowhere to store the oil onshore, so Russia will be forced in a very immediate timeframe, days, potentially a week or two to shut the oil wells on a very large scale,” they told a webinar on Tuesday.