Russia’s Oil Industry Is Suffering As The West Shuns Its Crude

Russia’s Oil Industry Is Suffering As The West Shuns Its Crude

Russia’s oil industry—a vital source of budget revenues—is already showing signs of slowdown as Western buyers shun Russian oil while Moscow struggles to replace lost sales in the West with sales in emerging Asian markets.

The war Putin started in Ukraine is hitting home: storage capacity is full, infrastructure and shipping logistics prevent Russian from exporting all the oil unwanted in the West to China and India, refineries are cutting run rates as product storage is overflowing, and as a result, companies are scaling back crude production.

This comes at a time when Russia, as a key member of the OPEC+ pact, is allowed to raise its crude oil production by more than 100,000 barrels per day (bpd) each month as the alliance is unwinding its cuts by a planned 400,000 bpd per month.