Oil production in Russia fell to a 16-year low

According to data provided by the high-ranking official, oil production in Russia has been declining for the third consecutive year: in 2022, it was 535 million tons, in 2023 – 530 million, and in 2024 – 516 million. Lower volumes were recorded only in 2009, when 494.2 million tons were produced in the country. Even in the pandemic year of 2020, the indicator was slightly higher – 512.7 million tons.

For 2025, the Russian government planned to increase production to 520 million tons. Moreover, within the framework of the OPEC+ deal, Russia was allowed to increase production – the daily quota grew to 9.57 million barrels. However, in fact, by the end of the year, only about 9.33 million barrels per day were produced, and in December, volumes unexpectedly sharply decreased by another 250 thousand barrels daily.

Experts link this to US sanctions against major Russian oil companies, which hit exports to India and China. Since the end of November, when the sanctions came into force, about 35 million barrels of oil remained unsold and effectively "stuck" in tankers at sea. According to estimates, storage capacities for further holding such oil are already exhausted.

An additional problem was the sharp collapse in prices for Russian Urals oil – it is now sold at 35-37 dollars per barrel, which is almost half the price of Brent. Because of this, production at a number of fields became unprofitable. According to estimates, companies are losing about 5 dollars on every barrel sold in approximately half of their oil projects. This deepens the financial problems of the industry: the profits of the largest companies have already significantly decreased.

Analysts note that the oil industry, which provides about a quarter of Russia's budget revenues and almost half of its export earnings, is gradually entering a crisis. In 2019, at its peak, the country produced 560 million tons of oil per year, but after a decline during the pandemic, it was unable to return to those levels. Over seven years, production decreased by approximately 9%, of which almost 5% occurred after the start of the war.

According to Russia's long-term energy strategy, in the inertial scenario, oil production could decrease to 477 million tons in 2036 and to 287 million tons in 2050. Due to the depletion of old fields, exports could decrease threefold – from 234 to 79 million tons per year.

In an even more negative, "stressful" scenario, which assumes strengthened sanctions and an accelerated global move away from hydrocarbons, by 2050 Russia will produce only about 171 million tons of oil annually, and oil exports may disappear entirely.

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