Global crude oil supply further tightens, with Russian crude oil production falling to a 10-month low.
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Against the backdrop of Ukraine’s continued strikes on Russia’s energy infrastructure, Russia’s crude oil output has further declined, intensifying supply pressures in the global oil market.
On Wednesday, May 13, according to OPEC's monthly report, Russia’s average daily crude oil output in April fell to 9.057 million barrels, down by 107,000 barrels compared to the revised March data, hitting the lowest level since June last year.
Since the outbreak of the Russia-Ukraine conflict in 2022, Russia has made most of its oil industry data confidential, making independent assessments of its output by outsiders quite challenging. The International Energy Agency (IEA) previously estimated that Russia’s crude oil supply in April was about 8.8 million barrels per day, down by 140,000 barrels from March.
This production shortfall is overlapping with the situation in the Middle East, forming dual supply pressures. Saudi Arabia told OPEC that its oil output has dropped to its lowest level since 1990.
The war in Iran has almost halted exports from Persian Gulf oil producers via the Strait of Hormuz, and refineries in Asian countries including Japan are scrambling to find alternative energy supplies outside the Persian Gulf.
After rising more than 7% in the past two trading days, crude oil prices edged down slightly on Wednesday.
Russian Refining Operations Suffer Blow
Ukraine has recently drastically escalated its attacks on Russian energy infrastructure.
According to reports, in April Ukraine carried out at least 22 attacks on Russian refineries, offshore assets (including export terminals), and pipeline facilities, the highest monthly number since December last year. The sustained strikes have pushed Russian refinery throughput down to multi-year lows.
This move by Ukraine aims to prevent Russia from benefiting from the current oil price surge and demand growth driven by the Iran conflict.
In addition, the contraction of Russian upstream drilling activities has also affected Russia’s oil output.
In 2024, Russian oil companies have cut drilling volumes to a three-year low. Facing multiple pressures in 2025—including falling global oil prices, a deepening discount on Urals crude, and a strengthening ruble—oil companies continue to cut back on drilling investments.
Normally, the impact of reduced drilling activity on output takes several months to fully materialize, so current output pressures are expected to persist.In its Oil Market Report, the IEA stated:
Since global oil inventories have already been falling at a record pace, oil prices may fluctuate further before the summer demand peak arrives.
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