Russia’s oil output falls nearly 1M barrels below OPEC+ quota as Ukrainian strikes cripple infrastructure

Russia produced almost 1 million barrels per day less crude oil than its OPEC+ quota allowed in July, a staggering shortfall driven by relentless Ukrainian drone strikes on the country’s oil infrastructure. OPEC+ has been gradually unwinding its production cuts, approving a collective output increase of 188,000 barrels per day effective August. Russia was supposed to be part of that ramp-up. Instead, it’s moving in the opposite direction. Drone warfare meets petroleum economics Ukraine has been hammering Russian oil facilities with near-daily drone attacks, and the results are showing up in hard production data. Major installations belonging to Gazprom Neft, Rosneft, and Lukoil have all sustained damage, with the Gazprom Neft Moscow Refinery and the Omsk refinery, previously Russia’s largest, among the hardest hit. The Moscow refinery is unlikely to return to full operations before year-end. Russian refinery throughput dropped to a 24-year low in July. To put that in perspective, you’d have to rewind to 2002 to find a month when Russian refineries processed less crude. Oil product export loadings from Russia fell 23% month-on-month in July, a steep decline that reflects both damage...