Russia's Oil Industry Is Running Out of Room to Absorb More Shocks
Oracle’s $165 Billion Data Center Plan Hits a Gas Pipeline Delay Rystad Energy is an independent energy consulting services and business intelligence provider offering global databases, strategic advisory and research products for energy companies and suppliers,… Following a year of tighter sanctions and Ukrainian attacks on refineries, ports and tankers, Russia’s crude output has fallen further in the second half of 2026, severely affecting the nation’s crude production outlook.
Factoring in these disruptions, Rystad Energy has revised its Russian crude production forecast to average 8.95 million barrels per day (bpd) in 2026, before declining to around 8.6 million bpd in 2027.
This represents a decline of 90,000 bpd compared with our previous forecast, reflecting the continued impact of renewed disruptions at western Russian export terminals and rising risks to seaborne exports, which have become less reliable and more expensive.
The nation also has little scope to absorb further supply disruptions, with onshore crude inventories already at levels where sustained production cuts become increasingly difficult to avoid.
Even if operational constraints are eased, a meaningful recovery in output appears unlikely.
A projected global oil surplus in 2027 is expected to pressure benchmark prices, eroding Russia's bargaining power with buyers while deep crude discounts, sanctions-related costs and lower sales volumes continue to weigh on producer revenues.
Beyond the near term, the country's production outlook is becoming increasingly constrained as aging, high-water-cut wells remain offline for longer, reducing effective spare capacity, while a lack of sizeable greenfield developments limits its ability to offset declines from mature fields after 2027.
The increasing frequency and effectiveness of drone attacks on Russian oil and gas infrastructure is no longer affecting only refineries; it’s constraining the country's upstream sector as well.
Refinery runs in June and July were among the lowest recorded in the past two decades, while throughput is forecast to average around 4 million bpd between July and December, almost 30% below the 2016-2023 seasonal average of roughly 5.7 million bpd.
We expect refinery activity to recover gradually as the intensity of drone attacks eases.
Even so, Russia is still likely to process around 1.4 million bpd less crude in the second half of the year than historical seasonal patterns would suggest.
Every barrel not processed by a refinery must either be exported, placed into storage or removed from production.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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