Sanctions lead to a significant decline in oil production in Russia
Russian oil producers significantly reduced production in December 2025, which was one of the worst figures for the last 18 months. Average daily production fell to 9.326 million barrels. This decline was the result of increased sanctions pressure from the West, which affected demand for Russian oil and complicated export channels.
It is worth noting that current oil production remains more than 100 thousand barrels less than in November and almost 250 thousand barrels behind the quotas set by OPEC+. This decline in production is the largest seen since June 2024 and indicates a gradual deepening of structural problems in the industry rather than random fluctuations.
Russian oil exports remain at an acceptable level, around 4 million barrels per day, but more and more volumes of oil are finding themselves without buyers. Since the end of November 2025, unsold oil reserves, which are mostly accumulated at sea, have increased by 30 million barrels to 185 million barrels, increasing risks to the logistics and financial stability of producers.
An additional factor restraining production is the decline in global oil prices, which has significantly affected the industry's profitability. Thus, Russia's quota under the OPEC+ deal of 9.574 million barrels per day is unlikely to be met, as companies do not have sufficient economic incentives to increase production under current price conditions.
Together, these factors point to a systemic crisis in the Russian oil sector. Even if prices stabilise, it will be difficult for Russia to return to meeting OPEC+ quotas. This means that in 2026, the country will likely not receive the planned foreign exchange earnings, which will put more pressure on the federal budget. The Kremlin will likely be forced to compensate for the losses by raising taxes in other sectors, raising debt more actively, or cutting investments, which in turn will only exacerbate the degradation of the oil and gas sector.
Source and illustration Foreign Intelligence Service of Ukraine
