Russia’s oil producers cut drilling activity in 2025 to the lowest level in three years, raising concerns about production growth in the coming months as sanctions, lower prices and currency movements squeeze profitability. Industry data shows rigs drilled around 29,140 kilometres of production wells last year — about 3.4% less than in 2024. After strong activity early in the year, drilling began to slow from June and dropped sharply toward year-end, falling roughly 16% in December compared with a year earlier, said a Bloomberg report.
The decline reflects mounting pressure on Russian oil companies from weaker global crude prices, wider discounts on Russian barrels due to tighter Western sanctions and a stronger ruble, which has reduced export earnings.
Russia, a key player in the OPEC+ alliance alongside Saudi Arabia, has already seen output fall for two consecutive months amid export constraints. Reduced drilling could add further pressure as the group evaluates future supply policy.
Analysts note that oil production trends typically follow drilling activity with a lag of several months. Experts say the slowdown represents a shift by companies into cash-preservation mode as profitability deteriorates.
The price of Urals — Russia’s main export blend — dropped significantly, and discounts to Brent widened after sanctions targeted major producers such as Rosneft and Lukoil, forcing buyers to demand deeper price incentives.
At the same time, the ruble strengthened sharply against the dollar, further eroding the economics of new wells by reducing the ruble value of export revenue.
While the immediate impact on output has been driven largely by sanctions, logistical challenges and weaker demand, the full effect of reduced drilling is expected to become visible later in 2026, particularly in the second and third quarters.
With many mature oil fields naturally declining, analysts estimate Russia needs to drill roughly 26,000–29,000 kilometres of wells each year to maintain daily production near current levels. Sustained drilling below that threshold could lead to further output declines and potential loss of market share within OPEC+.
Forecasts suggest Russia’s crude output may dip slightly this year, though higher production of condensate could offset the decline and keep overall oil supply close to 2024 levels. Experts say the country retains significant long-term production capacity, but future output will depend on economic conditions, OPEC+ policy, financing costs, technology access and the impact of external sanctions.
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