Russia cuts expected 2026 oil output to 17-year low, says report; what it means for India

Russia is expecting its oil production to fall to its lowest level in 17 years this year, even as crude exports rise (AI generated image)Russia is expecting its oil production to fall to its lowest level in 17 years this year, even as crude exports rise, with India and China emerging as the main destinations for additional Russian oil amid disruptions caused by the war in Ukraine.

According to a Russian government draft forecast seen by Reuters, crude production is expected to decline by 17.2 million metric tonnes in 2026 to 494.2 million tonnes, or 9.88 million barrels per day. That would be Russia's lowest annual output since 2009.

The forecast is expected to be finalised later in September 2026 and will be used in preparing the country's budget. Despite the decline in production, Russia expects its crude exports to increase this year, Reuters reported.

The draft forecast puts crude exports at 244.7 million tonnes, up from 230.8 million tonnes in 2025 and 7.5 million tonnes above the previous forecast issued in May. Reuters reported that the increase in crude exports is partly linked to falling fuel production after Ukrainian drone attacks disrupted Russian refineries.

With less crude being processed domestically, more oil has been available for export, primarily to India and China. The development is particularly significant for India, which has sharply increased its reliance on Russian crude since the European Union restricted most imports of Russian oil following Moscow's invasion of Ukraine.

India's Russian oil imports reached a record share in July, accounting for 50.83% of the country's total crude imports, or 2.47 million barrels per day, according to trade data cited by Reuters. Imports were 62.4% higher than a year earlier, although they were slightly below the record level recorded in June.

The latest Russian forecast represents a substantial downward revision. Oil production estimates for 2026 to 2029 have been reduced by between 16 million and 20 million tonnes compared with the government's May projections.

Production is expected to recover to 500 million tonnes in 2027, but that would still be 16 million tonnes below the earlier forecast. Output is projected to rise further in 2028 and 2029, although it would remain below 2025 levels.

Russia's Deputy Prime Minister Alexander Novak acknowledged in June that oil production had fallen since the beginning of the year, attributing the decline to unplanned refinery maintenance. The lower Russian production outlook comes at a time when India has been buying large volumes of Russian oil.

Russia accounted for 50.83% of India's crude imports in July, with Indian refiners taking around 2.47 million barrels per day, according to data cited by Reuters. Russia's share averaged 43.25% during the first four months of India's 2026-27 financial year, compared with 37% a year earlier.

More recent Kpler data reported by Business Standard showed Russian crude imports were expected to fall to about 2.1 million barrels per day in August, from roughly 2.6 million barrels per day in June and July. Even after that decline, Russia remained India's largest crude supplier, accounting for more than 40% of imports.

The apparent contradiction between falling production and rising exports is linked partly to Russia's refining problems.