The populist Russian newspaper, Komsomolskaya Pravda, ran the headline yesterday: “Russia takes first place in oil output rankings”. The story was based on OPEC figures showing that Russia is now extracting more oil than Saudi Arabia. The figures reflect a trend stretching back as far as 2002, but are being hailed by Russia as evidence that its production spikes are not one-offs and it is really the world’s No 1 oil producer.

According to Opec, Russia extracted 9.236 million barrels of oil a day in June, 46,000 more than Saudi Arabia. The statistics also showed that Russian production in the first half of this year increased to 235.8 million tons, a year-on-year improvement of 2.3 per cent.
Traditionally, Saudi Arabia has always been regarded as the world’s undisputed primary source of oil with Russia in second place. But not any more. However, Russian analysts concede that Moscow’s cause is helped by the fact that Saudi Arabia is subject to Opec output restrictions. But for now Russia is enjoying its oil bonanza: According to Alexei Kudrin, the Russian Finance Minister. “At present, we are in a dangerously carefree zone,” he said recently.

The statistics, from the oil cartel Opec, reflect a trend that has seen the Russians periodically surpass the Saudis as the world’s biggest oil producers on and off since 2002.

These latest figures are being hailed in Russia as evidence that such periodic production spikes are not one-offs and that Moscow really does have a right to lay claim to the No 1 spot.

According to Opec, Russia extracted 9.236 million barrels of oil a day in June, 46,000 more than Saudi Arabia. The statistics also showed that Russian production in the first half of this year increased to 235.8 million tons, a year-on-year improvement of 2.3 per cent.

Traditionally, Saudi Arabia has been regarded as the world’s undisputed primary source of oil and Russia has had to settle for second place. But in recent years Russia has renationalised and modernised much of its industry and that policy now appears to be paying off.

Even Russian analysts concede that Moscow’s cause is helped by the fact that Saudi Arabia is subject to Opec output restrictions.

The Saudis are famous for their ability to access spare capacity and raise production at short notice and if they really wanted to reassert their leadership role the feeling is they could do so easily.

Unconcerned by such “details”, Russia’s “toppling” of the Saudis was welcomed domestically yesterday. The populist Komsomolskaya Pravda daily newspaper ran a story headlined “Russia takes first place in oil output rankings”.

With oil prices hovering above $70 a barrel for London Brent crude because of uncertainty over Iranian supply and BP’s pipeline crisis in Alaska, Russia is enjoying an unprecedented bonanza.

But analysts say its oil industry is already working close to capacity and that it will be able to manage output increases of up to only 2 per cent a year between now and 2009.

There are also fears that Russia is becoming too addicted to what politicians call “the oil needle” and is doing too little to develop future revenue streams.

Money from oil and gas accounts for 52.2 per cent of all revenues to the state treasury and more than 35 per cent of Russia’s exports.

Such riches can make a country complacent, according to Alexei Kudrin, the Russian Finance Minister. “At present, we are in a dangerously carefree zone,” he said recently.