IEA Cuts Russian Oil Output Forecasts After Ukraine Attacks

• IEA reduced Russian oil supply outlook by 85,000 bpd for 2026 and 150,000 bpd for 2027, projecting 8.9 million bpd this year and 8.8 million bpd in 2027
• Russian crude exports surged to 5.8 million bpd in June (up 620,000 bpd from May) as refinery attacks forced more crude to be shipped abroad rather than processed domestically
• Russia introduced a diesel export ban this week, adding to existing gasoline and jet fuel restrictions, to combat domestic fuel shortages caused by Ukrainian strikes on refineries

IEA Cuts Russian Oil Output Forecasts After Ukraine Attacks

The International Energy Agency (IEA) has downgraded its Russian oil production forecasts due to intensified Ukrainian drone strikes on energy infrastructure, the agency announced Friday.

Key Revisions:

• 2026 outlook cut by 85,000 barrels per day (bpd) to 8.9 million bpd
• 2027 outlook reduced by 150,000 bpd to 8.8 million bpd
• Both years now average 8.8 million bpd over the forecast period
• Down from 9.2 million bpd produced in 2025

Current Production Status:

Russia's June crude production reached 8.86 million bpd, up 120,000 bpd from May, but remains 900,000 bpd below its OPEC+ quota. Russia is the world's third-largest oil producer.

Export Dynamics:

Refinery attacks have paradoxically boosted crude oil exports as damaged facilities reduce domestic refining capacity:

• Total June crude exports: 5.8 million bpd (up 620,000 bpd from May)
• Western ports (Primorsk, Ust-Luga, Novorossiysk) hit record high near 3 million bpd in June, expected to maintain July levels
• Oil product exports declined 230,000 bpd to 1.91 million bpd

Market Implications:

Ukraine's sustained drone campaign targeting refineries, storage facilities, and transport infrastructure is reshaping Russian oil flows. Russia has responded by introducing diesel export bans this week, adding to existing gasoline and jet fuel restrictions to address domestic fuel shortages.

The production cuts and export restrictions could tighten global oil markets, particularly affecting refined product availability, while increased crude exports may partially offset supply concerns.