BNO - Russia's Oil Production To Never Return To The Peak? That's Not A Surprise

• Russia's energy ministry forecasts production to never surpass its previous peak.
• In its base case, Russia's oil production is expected to recover to ~11.1 mb/d and peak there. In its most bullish case, it rises to ~12.8 mb/d.
• We wrote last year that the Saudi price war combined with the demand drop from COVID-19 will result in permanent production loss worldwide including Russia.
• If Russia's decline profile is anything similar to that of the US (for smaller producers), we estimate that even if Rosneft produced all out, Russia will produce ~11 mb/d.
• But the Russian story is just one part of the bigger story, other non-OPEC ex-US production declines will also become more pronounced in the years ahead.

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