Russia cuts oil production forecast to 17-year low

Russia has lowered its 2026 oil production forecast to a 17-year low, with the state government revising down fuel export projections for 2026 and 2027, according to Reuters reporting on September 1 based on a draft government forecast. The cuts in oil production estimates for 2026-2029 range from 16 to 20 million tons compared to the previous forecast in May.

The European Union's ban on Russian oil and fuel imports since the February 2022 war has significantly impacted Moscow's revenue, while intensifying Ukrainian drone attacks on refineries have also reduced fuel production and caused gasoline shortages. The baseline scenario projects a drop to 494.2 million tons of oil production in 2026, the lowest level since 2009.

Oil production is expected to recover in 2027, but it remains below 2025 levels even then. Crude oil exports are forecast to reach 244.7 million tons this year, up 7.5 million tons from 2025, but drop to 232.5 million tons in 2027 and further to 216.6 million tons in 2028-2029. To combat domestic shortages, Russia has imposed a diesel fuel export ban and restrictions on foreign sales of gasoline and aviation fuel.

Consequently, fuel exports are forecast to fall by 27.3 million tons to 98.5 million tons in 2026, significantly below the 2025 levels and previous estimates. Meanwhile, fuel imports from India, Kazakhstan, and Morocco have helped alleviate the crisis, yet Vladimir Putin's approval rating has dropped to a record 66%, its lowest since the fall of 2022.