Announcement of a series of analytical reports «The fuel and energy complex of Russia» - 2024

For two years the Russian energy sector has been sanctioned. Its operation has changed quite a lot.

The European oil market has been lost, that of India conquered. Supplies to China have been increased. Third countries have established an industry refining oil into petroleum products that are then legally supplied to Western states. Tankers are put on SDN lists, but change their “domicile” and continue to carry oil. An insurance and settlement system has been established.

However, can one say that the worst is over? All is not that simple.

The US continues to look for options to reduce the presence of Russian oil in foreign markets. Discounts on Russian oil still exist. Gazprom has lost 80% of the European market and this is something that is much more difficult to replace. Sanctions have been imposed on Arctic LNG 2 – and at once liquefied gas shipments have become an issue. The Northern Sea Route has not become a transport alternative to the Suez Canal to date, as almost half of the oil exports continue to be carried through it despite military risks.

So questions remain. And not only about sanctions. How effectively do government regulators help the sector? What are the energy development priorities as seen by the state? Have Russian energy relations with the EU been severed for good? These are the questions that we will look into thoroughly in our reports.

The series, as usual, consists of eight reports to be released in April 2024 through Febraury 2025.

1. The West’s latest sanctions decisions and their effect on the Russian oil and gas industry

(22 April 2024)

The report analyses the latest sanctions decisions made by the US, EU, and United Kingdom.

A desire to tighten the “price cap”, a war on ships, expansion of SDN lists, restrictions on equipment supplies and transactions, pressure on third countries.

What do sanctions documents actually read? What short-term and longer-term implications will this have?

2. Lithium: a new energy Eldorado?

(20 May 2024)

We will try to understand if lithium can become a “new oil” for investors and energy companies.

The research will describe the overall state of the global lithium market and the pricing system and make supply and demand forecasts. Lithium production options will be considered.

Special attention will be paid to direct lithium extraction (DLE) that may prove of particular interest to the Russian oil corporations. The potential will be assessed of Russian lithium production projects and their integration with future supply chains.

3. Government 2024: a new configuration of regulators

(8 July 2024)

Russia will have a presidential election on 15-17 March. Vladimir Putin’s victory is beyond doubt. Under the Russian Constitution, however, a newly-elected president dismisses the old government and nominates a candidate for Prime Minister to the Duma. This will happen after the inauguration on 7 May 2024.

Putin may, of course, again propose Mishustin, yet the government will have to be formed anew all the same. Changes are possible, in terms of staff and structure alike. They may directly affect oil and gas.

The report will deal with Cabinet changes and other staff decisions made after the election. What will change in regulatory practices? And what will the president instruct the sector to do in his new inauguration decree?

4. Green and climate agenda: a reset attempt

(29 July 2024)

Counter to the logic of a total conflict with the collective West, the green and climate agendas are not cancelled in Russia. Russia continues to participate in all international events on climate and declares its commitment to the Paris Agreement values.

The Economic Development Ministry openly says that Russia will not stop climate projects and suggests returning to the matter of carbon payments. Quantitative restrictions on greenhouse gas emissions are being prepared. The list of sectors is being enlarged that must submit reports on greenhouse gas emissions. A register of carbon units is promoted. The experiment on Sakhalin continues.

So does it turn out that the “green agenda” is seeing a revival? Who is the beneficiary thereof and to what may this lead?

5. Current status of Russian oil exports

(19 August 2024)

For eighteen months the Russian oil industry has been under an embargo and a “price cap”.

How are logistics, insurance, and trade restructured? Do sales volumes change? How do the main buyers behave: India, China, and Türkiye? At what prices and discounts is Russian oil sold?

6. Northern logistic route: when to expect a breakthrough?

(30 September 2024)

If Russia had a fully functional NSR, the problem of shipping hydrocarbons and redirecting them to Asia would not be so urgent. The point is, however, that for a long time the NSR remained a mere publicity project. Many things were shifted to the right on the time scale.

So what, after all, are the real prospects for the NSR? Who and how runs the project? What is with icebreakers? A separate uncertainty: shipping LNG from Novatek’s projects, particularly from the sanctioned Arctic LNG 2.

7. Gazprom in search of a new model

(13 January 2024)

By late 2024 it will finally become clear if Gazprom can count on at least some recovery of the flows to the European market. Also, if the contract with China for Power of Siberia 2 has been signed.

The report presents an analysis of Gazprom’s export strategy and of the discussion about the destiny of the domestic market. What has the foreseeable future in store for the monopoly?

8. Oil and gas sector regulation in 2024 and the outlook for 2025

(17 February 2025)

It is our tradition to finish the series with a concluding report that sums up the main events and trends of the year.

You will find in the report not only analysis of interim production results, but an assessment of the efficiency of government regulators’ support for the oil and gas industry that has found itself under unprecedented pressure of sanctions.

We will also make a forecast for Russian oil and gas sector development in the medium term.