Economists at OPEC see Russian oil production growing along with the nation's economy. Photo by akiyoko/Shutterstock
VIENNA, Sept. 12 (UPI) -- With oil production on pace to increase through the year, economists at OPEC said Russia's economy is already on a clear road to modest recovery.
In its monthly market report for September, economists at the Organization of Petroleum Exporting Countries said the Russian economy remains in recession through the year, though recovery is expected in 2017.
"It has been confirmed that GDP declined by 0.6 percent year-on-year in the second quarter, after seeing a 1.2 percent drop in the first quarter," the report read. "This represents the smallest contraction in the economy since it fell into recession in first quarter 2015."
In July, the International Monetary Fund said the Russian economy would stay in recession for the rest of the year because of dual strains of low oil prices and the impact of Western sanctions imposed because of the Kremlin's stance on crises in Ukraine. Last week, the government transferred $6 billion from the reserve fund to cover a gap in the budget, thus depleting the fund by 18 percent from August.
Russia is among the supporters of a move to curtail production in an effort to artificially stimulate the price for crude oil, which has not changed much over the last year, but remains more than 50 percent below the price from 2014.
OPEC said crude oil production from Russia declined to a 13-month low in August because of maintenance at its Sakhalin oil field. Oil production during the first half of the year was higher than during the same period last year and OPEC's full-year estimate for Russia was revised higher, though year-on-year levels were more or less steady.
"Russian oil production is expected to decline by 90,000 barrels per day in the second half of this year compared to the first half, but up by 90,000 bpd from the same period a year earlier," OPEC economists said.
Overall, OPEC said Russian oil production for the year is expected to increase 1.3 percent to average almost 11 million barrels per day in 2016, an upward revision of 20,000 bpd from OPEC's previous estimate.