12 May 2026
Oil production in Russia will continue to decline for the fourth consecutive year in 2026, falling to its lowest level in 17 years, according to the Ministry of Economic Development’s updated macroeconomic forecast.
According to the Ministry of Economic Development, oil producers will extract 511 million tons of oil by the end of the year, compared to 511.4 million last year, 516 million in 2024 , 530 million in 2023 , and 535 million in 2022.
Compared to the first year of the war, oil production will thus decline by 4.5%, and its volumes will be the lowest since 2009, when Russia pumped 494.2 million tons. Even during the pandemic crisis, in 2020, production was slightly higher —512.7 million tons.
Back in September, the Ministry of Economic Development forecast an increase in production this year to 525 million tons, and then to 540 million by 2028. According to new estimates, production will barely reach 525 million tons in 2027 and will not rise above that level.
The decline in Russian oil production, which began late last year and accelerated in the spring despite OPEC+ quotas allowing higher pumping, is the result of companies’ deteriorating financial positions, notes independent expert Gennady Maksakov, former head of research and analytics at Yakov & Partners.
Last year, oil producers cut drilling to a three-year low after escalating sanctions, cheap oil, and a strong ruble slashed their profits (by a factor of four for Rosneft and by half for Gazprom Neft), while Lukoil became unprofitable for the first time in two decades. Companies have switched “to cash-saving mode,” says Maksakov, and the results will continue to be felt in declining production—at least until the second and third quarters of this year.
Overall, “the Russian oil industry is in zugzwang,” says Sergei Vakulenko, a research fellow at the Carnegie Berlin Center: oil production in Russia will decline slowly but steadily in the near future—at a rate of about 3% per year.
“However, maintaining the plateau or increasing production is only possible by bringing reserves with a full-cycle technical cost of over $35–40 per barrel into production, something the Russian oil industry currently lacks the capital for, and the government is unwilling to retain that capital,” Vakulenko points out. Furthermore, he continues, wartime circumstances are having an impact: for example, the need to spend money on repairs to refineries under attack, or the instability of cash flow.
Vakulenko believes that it is practically impossible to launch major new projects in Russia, including those aimed at the large-scale development of new classes of reserves, primarily shale oil: “The reasons are both the excessively high cost and capital intensity relative to existing production, and the restrictions caused by the war.”
Now ruSSia will collapse and Ukraine retake all occupied territories. I can sleep now…
Good, Mike, I’m glad I made you happy.
There’s young men in their trenches suffering, and this is the only good news they get to read???
They can take solace knowing Moskovia is burning every night.
Got anything better?