Russia's Oil Output Slumps Amid Ongoing Disruptions

Russia's crude oil production has taken another hit due to disruptions from tighter sanctions and Ukrainian attacks on refineries, ports, and tankers. According to Rystad Energy, Russia's crude output fell further in the second half of 2026, leading to a revised forecast for average production at 8.95 million barrels per day (bpd) this year and 8.6 million bpd next year.

The decline represents a loss of 90,000 bpd from Rystad Energy's previous forecast, reflecting the ongoing impact of renewed disruptions at western Russian export terminals and rising risks to seaborne exports. Russia has little room for further supply disruptions, with onshore crude inventories already near levels that trigger production cuts.

Rystad Energy estimates that Russia's spare production capacity will rise modestly from 620,000 bpd in 2026 to 700,000 bpd next year, but this is tied to aging wells shut down due to current production cuts. The longer these wells remain offline, the less likely they are to return at previous rates, as extended shutdowns increase the risk of costly interventions and lower productivity.

The global oil market is expected to move into surplus in 2027 if the conflict in the Middle East eases and disrupted supply flows normalize, putting downward pressure on benchmark prices and further eroding Russia's bargaining power with buyers.