Russia's oil production and exports saw a substantial decline in August, largely attributed to intensified Ukrainian drone strikes on its refineries and Black Sea ports. Crude shipments fell for a fifth consecutive week, with overseas flows dropping to 3.46 million barrels a day in the four weeks ending August 23. This is the lowest level since April, as drone attacks halted Black Sea loadings, including from the key Novorossiysk terminal for a week. OPEC reported that Russia's oil production in August decreased by 160,000 barrels per day from July, reaching 8.718 million barrels per day, the lowest in six years and almost 1 million barrels below its OPEC+ quota.
The persistent drone attacks have also led to a significant reduction in crude processing rates at Russian refineries, creating domestic gasoline supply issues. While Russia initially diverted unprocessed crude to exports during earlier refinery strikes, the current attacks on oil tankers in the Black Sea have made this increasingly difficult. To compensate, Moscow has redirected Kazakh barrels to Novorossiysk to free up space at the less vulnerable Baltic Ust-Luga terminal.
The financial impact on Russia is evident, with the gross value of Moscow's exports declining to $1.65 billion a week in the 28 days leading up to August 23, an $80 million weekly drop. Despite this recent plunge, Russia's seaborne crude exports for 2026 are still about 9% higher than the highest average for any year since the 2022 invasion. Shipments to Asian customers, including those with undeclared destinations, decreased to 3.29 million barrels a day in the period to August 23, down from 3.43 million a week prior. Flows to Turkey, Russia's largest buyer west of Suez, also slipped to approximately 100,000 barrels a day.
Analysts from Rystad Energy have revised their forecast for Russia's average crude production in 2026 down to 8.95 million barrels per day, with a further decline to around 8.6 million barrels per day in 2027. This reflects the increasing unreliability and cost of seaborne exports. The country's onshore crude inventories are already at levels that make sustained production cuts difficult to avoid. Rystad also estimates Russia's spare production capacity at about 620,000 barrels per day in 2026, much of which is in aging wells that risk permanent loss if shut in for too long, further limiting future recovery potential.
