Russia's crude oil production declined to an average of 9.009 million barrels per day in May, reaching the lowest level in the past year. This figure was approximately 690,000 barrels below the country's production target under the OPEC+ agreement.
The drop coincided with a period of intensified Ukrainian attacks on Russian energy infrastructure. At least 31 attacks were carried out on oil facilities in Russia throughout May.
Six-Month Decline in Production
According to OPEC's monthly report, Russian production also decreased compared to April, marking the sixth consecutive month of decline in the country's oil output.
Since the peak of 9.38 million barrels reached in November, production has fallen by about 370,000 barrels. The May data clearly fell short of Russia's target under the OPEC+ agreement.
Increasing Pressure on Energy Infrastructure
Ukrainian attacks targeted refineries, oil export terminals, and pipelines. These attacks are reported to aim at straining Russia's energy revenues, which are critical for financing the war.
Energy and gas revenues have accounted for roughly one-quarter to one-third of Russia's federal budget revenues in recent years. Therefore, the decline in production is closely monitored in terms of Moscow's budget balance.
Weak Trend Continues into Early June
It was reported that Russia's crude oil processing rates in June also fell to the lowest levels in two years, indicating that the production decline was not limited to May alone.
Data shows that the impact of the war on the energy front is being felt simultaneously across production, processing, and shipment lines. Pressure on Russia's oil sector is expected to continue in the coming period.
