Amid Ukraine's sustained strikes on Russian energy infrastructure, Russia's crude oil production has contracted further, intensifying supply pressures in the global petroleum market.
According to OPEC's monthly report released on Wednesday, May 13, Russia's average daily crude output in April fell to 9.057 million barrels, a decrease of 107,000 barrels from the revised March figure, marking the lowest level since June of last year.
Since the onset of the Russia-Ukraine conflict in 2022, Russia has classified most of its oil industry data, posing significant challenges for independent assessments of its production. The International Energy Agency had previously estimated that Russia's crude supply in April was approximately 8.8 million barrels per day, down by 140,000 barrels from March.
This production shortfall is compounding with tensions in the Middle East, creating a dual supply squeeze. Saudi Arabia has informed OPEC that its oil output has dropped to the lowest level since 1990.
The conflict in Iran has nearly halted exports from Persian Gulf producers via the Strait of Hormuz, prompting refineries in Asian countries, including Japan, to scramble for energy supplies from sources outside the Persian Gulf.
After surging more than 7% over the past two trading sessions, crude oil prices edged lower on Wednesday.
**Russian Refinery Operations Disrupted**
Ukraine has recently escalated its attacks on Russian energy infrastructure significantly.
Reports indicate that Ukraine launched at least 22 attacks in April on Russian refineries, maritime assets (including export terminals), and pipeline facilities, the highest monthly tally since December of last year. These sustained strikes have pushed Russian refinery throughput to multi-year lows.
Ukraine's strategy aims to prevent Russia from benefiting from the current rise in oil prices and demand growth driven by the conflict in Iran.
Additionally, a contraction in upstream drilling activity in Russia is also impacting its production levels.
In 2024, Russian oil companies reduced drilling to a three-year low. Facing multiple pressures in 2025—including a potential decline in global oil prices, a deeper discount for Urals crude, and a stronger ruble—companies continue to cut back on drilling investments.
Typically, the full impact of reduced drilling activity on production takes several months to materialize, and the current supply pressures are expected to persist. The IEA noted in its Oil Market Report:
With global oil inventories already declining at a record pace, oil prices could experience further volatility ahead of the peak summer demand season.
Comments