Russia's average daily oil production will decline by approximately 3% this year to 8.9 million barrels due to Ukrainian drone attacks on energy infrastructure, the International Energy Agency (IEA) reported in its monthly report, revising its forecast downward. If its forecasts are met, 2026 will be the fourth consecutive year of production decline, following 2022, when it was 9.8 million barrels per day.
Production is not expected to recover; it could decline to 8.8 million barrels in 2027. "Ongoing attacks on refineries, storage facilities, and transportation infrastructure are leading to a deterioration in our production outlook, and we have therefore lowered our production forecasts for this year and next by 85,000 and 150,000 barrels per day, respectively," the report states.
In 2025, Russia produced 9.2 million barrels per day. Last June, the figure was 8.86 million, 900,000 barrels per day below the OPEC+ quota, the IEA noted.
The inability to use feedstock for refining due to refinery shutdowns, as well as damage to oil storage facilities and delivery systems, are forcing companies to limit production. Another factor is the lack of investment in exploration and development, especially given that most Russian fields are old and largely depleted.
Adding to the refining problems caused by the Ukrainian bombings is a management crisis, which is further worsening the situation on the fuel market, according to Mikhail Khodorkovsky, who headed Yukos, then Russia's largest oil company, a quarter of a century ago. In a conversation with The Wall Street Journal, he assessed the losses in oil refining capacity as significant, but not yet critical:
The damage inflicted so far is the result of a management crisis, not a gasoline crisis. Russian society has been shown that Putin's management system is not working, and this is very unpleasant for Putin from a political perspective.
Deputy Prime Minister Alexander Novak, who oversees energy, insisted on July 1 that the Russian market was well-supplied with fuel, and that disruptions were due to "logistics problems." These "problems" forced the government to impose a ban on the export of jet fuel and diesel fuel (gasoline had been banned even earlier) and begin importing petroleum products.
On July 10, Novak admitted that the shortage "was caused by incoming flights" at refineries.
Gasoline production this week fell to 65% of average summer consumption levels due to shutdowns at major refineries, Reuters reported, citing industry sources.
According to Nikhil Dubey, lead analyst at Kpler, Russia lost approximately 45% of its refining capacity, or approximately 3.3 million barrels per day, due to the Ukrainian strikes in June. What's significant is not the sheer volume of capacity lost, but the fact that at a number of refineries, much more complex secondary processing units, which produce high-quality fuels such as gasoline and diesel, were shut down due to damage.
Therefore, Russia continues to export large volumes of primary refined products like naphtha and fuel oil, because such equipment is easier to repair, Dubey explained to The Times of India. However, secondary processing equipment is much more complex and must be imported (which is hindered by sanctions), and its reinstallation and repair will take much longer, he said.
Gasoline production in Russia this week fell to 65% of average summer consumption due to the shutdowns of major refineries, Reuters reports, citing industry sources.
In the first ten days of July, drone attacks and shutdowns targeted, among others, NORSI and the Omsk Oil Refinery—the largest gasoline producers, with a combined output of approximately 30,000 tons per day—as well as the Saratov Oil Refinery.
According to Reuters sources, given the plants' shutdowns since the beginning of the month, output has dropped to 75,000-80,000 tons per day, compared to domestic consumption levels typical for the summer period of approximately 115,000-120,000 tons per day.
Therefore, this week, the production gap between production and market demand could reach 40,000-45,000 tons per day, or approximately 35%, sources estimate.
In June, the production gap between production and consumption was estimated at approximately 25%.
Traders note that, on average, approximately 5,000-6,000 tons of gasoline per day of the shortfall is being replenished with supplies from Belarus, Reuters reports. The portion of the market's gasoline needs that is not met by production is being met by depleting previously accumulated stocks, the agency's sources say.
Demand for gasoline has also declined somewhat due to chaos at gas stations: many car owners are avoiding trips unless absolutely necessary and, if possible, are reducing their driving range, not wanting to wait in hours-long gas lines or be left with an empty tank in the middle of the road.
The fuel supply situation in Russia should improve by the second half of July due to the reopening of several refineries and increased gasoline imports, Reuters sources said.
Deputy Prime Minister Alexander Novak said at a government meeting on Wednesday that the situation on the fuel market remains "difficult" due to damage to refineries and rising demand, so the government has imposed a ban on diesel fuel exports and will begin importing petroleum products.
Earlier, in an effort to combat fuel shortages, the government allowed refineries to produce gasoline and diesel fuel with lower quality standards for the domestic market.
In June, Belarus increased its supplies of gasoline and diesel fuel to Russia to a record level. Seaborne imports of gasoline from India also began.
Production is not expected to recover; it could decline to 8.8 million barrels in 2027. "Ongoing attacks on refineries, storage facilities, and transportation infrastructure are leading to a deterioration in our production outlook, and we have therefore lowered our production forecasts for this year and next by 85,000 and 150,000 barrels per day, respectively," the report states.
In 2025, Russia produced 9.2 million barrels per day. Last June, the figure was 8.86 million, 900,000 barrels per day below the OPEC+ quota, the IEA noted.
The inability to use feedstock for refining due to refinery shutdowns, as well as damage to oil storage facilities and delivery systems, are forcing companies to limit production. Another factor is the lack of investment in exploration and development, especially given that most Russian fields are old and largely depleted.
Adding to the refining problems caused by the Ukrainian bombings is a management crisis, which is further worsening the situation on the fuel market, according to Mikhail Khodorkovsky, who headed Yukos, then Russia's largest oil company, a quarter of a century ago. In a conversation with The Wall Street Journal, he assessed the losses in oil refining capacity as significant, but not yet critical:
The damage inflicted so far is the result of a management crisis, not a gasoline crisis. Russian society has been shown that Putin's management system is not working, and this is very unpleasant for Putin from a political perspective.
Deputy Prime Minister Alexander Novak, who oversees energy, insisted on July 1 that the Russian market was well-supplied with fuel, and that disruptions were due to "logistics problems." These "problems" forced the government to impose a ban on the export of jet fuel and diesel fuel (gasoline had been banned even earlier) and begin importing petroleum products.
On July 10, Novak admitted that the shortage "was caused by incoming flights" at refineries.
Gasoline production this week fell to 65% of average summer consumption levels due to shutdowns at major refineries, Reuters reported, citing industry sources.
According to Nikhil Dubey, lead analyst at Kpler, Russia lost approximately 45% of its refining capacity, or approximately 3.3 million barrels per day, due to the Ukrainian strikes in June. What's significant is not the sheer volume of capacity lost, but the fact that at a number of refineries, much more complex secondary processing units, which produce high-quality fuels such as gasoline and diesel, were shut down due to damage.
Therefore, Russia continues to export large volumes of primary refined products like naphtha and fuel oil, because such equipment is easier to repair, Dubey explained to The Times of India. However, secondary processing equipment is much more complex and must be imported (which is hindered by sanctions), and its reinstallation and repair will take much longer, he said.
Gasoline production in Russia this week fell to 65% of average summer consumption due to the shutdowns of major refineries, Reuters reports, citing industry sources.
In the first ten days of July, drone attacks and shutdowns targeted, among others, NORSI and the Omsk Oil Refinery—the largest gasoline producers, with a combined output of approximately 30,000 tons per day—as well as the Saratov Oil Refinery.
According to Reuters sources, given the plants' shutdowns since the beginning of the month, output has dropped to 75,000-80,000 tons per day, compared to domestic consumption levels typical for the summer period of approximately 115,000-120,000 tons per day.
Therefore, this week, the production gap between production and market demand could reach 40,000-45,000 tons per day, or approximately 35%, sources estimate.
In June, the production gap between production and consumption was estimated at approximately 25%.
Traders note that, on average, approximately 5,000-6,000 tons of gasoline per day of the shortfall is being replenished with supplies from Belarus, Reuters reports. The portion of the market's gasoline needs that is not met by production is being met by depleting previously accumulated stocks, the agency's sources say.
Demand for gasoline has also declined somewhat due to chaos at gas stations: many car owners are avoiding trips unless absolutely necessary and, if possible, are reducing their driving range, not wanting to wait in hours-long gas lines or be left with an empty tank in the middle of the road.
The fuel supply situation in Russia should improve by the second half of July due to the reopening of several refineries and increased gasoline imports, Reuters sources said.
Deputy Prime Minister Alexander Novak said at a government meeting on Wednesday that the situation on the fuel market remains "difficult" due to damage to refineries and rising demand, so the government has imposed a ban on diesel fuel exports and will begin importing petroleum products.
Earlier, in an effort to combat fuel shortages, the government allowed refineries to produce gasoline and diesel fuel with lower quality standards for the domestic market.
In June, Belarus increased its supplies of gasoline and diesel fuel to Russia to a record level. Seaborne imports of gasoline from India also began.
