Russia faces major oil setback as 2026 output hits 17-year low

According to a government draft released today, Russia reduced its oil production projection for this year to a 17-year low and revised its fuel export forecasts for 2026 and 2027 due to the war with Ukraine.

The year-end estimates, which are yet to be finalized at the end of September and used in drafting the budget, decreased extraction estimates for 2026-2029 by between 16 million and 20 million tons compared to the previous forecast published in May.

The European Union has reportedly banned most of Russian oil and fuel imports as a crucial source of revenue for Moscow.

The intensification of Ukrainian drone attacks on Russia’s oil refineries in the past few months have also minimized fuel output, triggering depleted fuel supplies across the country. Crude production is intended to recover 500 million tons next year but still16 million tons below the lowered projection.

Russia’s Deputy Prime Minister Alexander Novak acknowledged in June that the country’s oil production has decreased since the start of the year, linking the decrease to unscheduled refinery shutdowns.

The significant reduction in fuel production was caused by the drone attacks, leading to an increase of crude oil exports. The draft forecast further indicated that Russia’s crude oil exports could reach 244.7 million tons this year, an increase from 230.08 million tons in 2025 and 7.5 million tons above the previous outlook.

Nonetheless, fuel exports are expected to expand to 113.1 million tons next year, marking a level almost 13 million tons below the 2025 level and 21 million tons below previous projections.