Russia pumped 8.88 million barrels of crude a day in July, down from an average of 9.07 million barrels a day over the first half of 2026, according to OPEC data. The decline ran deeper than expected and has prompted the consultancy Rystad Energy to lower its projections for Russian output this year and next.
A Two-Year Downgrade
Rystad now expects Russian crude production to average 8.95 million barrels a day in 2026 and to slip to 8.6 million barrels a day in 2027, roughly 90,000 barrels a day below its previous estimate. Two pressures drive the revision: sustained Ukrainian strikes on refineries, ports and tankers, and the tightening of Western sanctions.
Refining at a Two-Decade Low
Russian refinery runs in June and July were the weakest in twenty years. Throughput is projected to average about 4 million barrels a day between July and December 2026, against a seasonal average of 5.7 million barrels a day over 2023 to 2026 — a shortfall of close to 30 percent.
Costlier, Less Reliable Exports
The strikes have not stopped at refineries. Damage to ports and tankers has made seaborne exports less reliable and more expensive, on top of the extra export costs imposed by sanctions and the steep discounts Russian barrels carry against competing grades.
Storage Beyond Its Economic Limit
When refineries cannot absorb the crude and export routes narrow at the same time, the surplus piles up in onshore storage until it passes the economic limit of holding it. At that point producers have no option but to cut output at producing fields faster and deeper than their operating plans call for.
Idled Capacity and Permanent Loss
Idled production capacity in Russia is put at about 620,000 barrels a day in 2026, rising to roughly 700,000 barrels a day in 2027. The risk extends past any single year: many Russian wells are old and carry a high water cut, and long shut-ins may keep them from returning to earlier rates, turning part of that idled capacity into a permanent loss.
A Surplus Ahead in 2027
These constraints meet forecasts of a global oil supply surplus in 2027. In an oversupplied market buyers have more options, and the Russian producer’s leverage over prices and discounts weakens.
This story was produced in the newsroom from the disclosed sources named above.
