The Russian surge

Rising oil production in the past two years defied expectations. The market should expect more of the same in 2017

Russian oil output has shocked the market over the past two years. Many analysts expected depletion at Soviet-era fields in Western Siberia - home to more than 60% of the country's production - to lead total supply lower. Weak oil prices, an economic crisis and sanctions would also conspire to crimp production. Wrong. In 2015, Russia's producers pumped 10.7m barrels a day, a 1.4% rise on the year. In 2016, the growth accelerated and will come in at 2%, leaving output above 11m b/d, a post-Soviet record. The outlook for 2017 is similarly rosy. Production will stay slightly above 11m b/d. Three reasons explain why. First, upstream investments made when oil prices were higher, especially in so-