Russia's Crude Oil Production Slumps Amid Disruptions and Aged Wells

Russia's crude oil production is facing significant challenges due to disruptions at western Russian export terminals and rising risks to seaborne exports. According to Rystad Energy, Russia's crude production outlook has weakened, with a revised forecast of an average of 8.95 million barrels per day (bpd) in 2026, down from 9.85 million bpd previously estimated.

The decline is attributed to the increasing frequency and effectiveness of drone attacks on Russian oil and gas infrastructure, which is affecting not only refineries but also constraining the country's upstream sector. Rystad expects refinery throughput to average around 4 million bpd between July and December, almost 30 percent below the seasonal average.

Russia has limited room to absorb further shocks, with its spare production capacity estimated at around 620,000 bpd in 2026, rising modestly to 700,000 bpd in 2027. However, much of this capacity is tied to ageing wells that have been shut in during the current round of production cuts.

The problem extends beyond the immediate disruption, with Russia's mature oil fields facing natural production declines and a lack of sufficient sizeable new developments to offset those losses after 2027. Rystad sees limited scope for a meaningful recovery in crude production even if refinery and export constraints ease.