Russian oil exports will continue to grow in 2016

Russia is one of the key geopolitical players and often appears on the front pages of global news, including in the world oil trade. After several years of limited growth, exports of oil and petroleum products from the country grew significantly in 2015, despite a sharp drop in oil prices and Western sanctions. Recently, there have been some notable changes in the structure of foreign trade, and shifts in oil exports from the country continue.

Russia is the second largest producer of crude oil in the world in 2015, with an average output of 11.1 million barrels per day, the highest level since 1990. The largest volumes of Russian oil are produced in Western Siberia (about 60 percent). Fields in Eastern Siberia and the Russian Far East have been developed in recent years, helped in part by Chinese investment, and Russia's overall output has increased on the back of rising oil demand in Asia.

Between 2011 and 2015, the share of Russian oil exports to China, Japan and Korea increased from 11 to 30 percent, while the share of exports to the EU and the United States fell from 72 to 62 percent. The shift in trade patterns was driven in part by the expansion of oil production in the East, the robust rise in Asian demand in recent times, and Western sanctions.

At the same time, Russian exports of petroleum products have grown steadily in recent years. Overall, exports from Russia increased by 4 percent, according to estimates in 2015, amid tax breaks. However, the government is encouraging the modernization of old refineries to boost revenues.

So, in 2015, oil exports from Russia proved to be stable and in 2016 crude oil exports intend to grow further. Weak ruble, increased oil production in the East and existing contracts are expected to lead to further growth. While exports may ultimately come under pressure from a lack of investment due to sanctions and low oil prices, the outlook for Russian oil exports remains positive for now, experts say.