Russia Has Started To Sharply Reduce Oil Production

Because of supply problems in India and China.

Russian oil companies were forced to significantly cut production in December due to sanctions by the Donald Trump administration that have made it harder to sell oil to its biggest customers, India and China.

According to Bloomberg, citing a source familiar with official statistics, the Russian government has classified production data in 2022. In December, output fell by more than 100,000 bpd to 9.326 million barrels per day. This was the largest decline since mid-2024, when Russia was complying with OPEC+ quotas.

Now, under the agreement with oil-producing countries, Russia can increase production, but instead production in December unexpectedly fell and is 250 thousand barrels per day below the quota.

Oil sales for companies are also becoming increasingly difficult: although tankers continue to export about 4 million barrels per day, some crude is "stuck" at sea waiting to be unloaded. Since the end of November, the volume of unsold Russian oil has increased by 30 million barrels. Additionally, Ukrainian strikes on Lukoil's fields in the Caspian Sea may have affected production, Bloomberg notes.

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