Anna Hartz
Russia’s storage tanks and tankers are filling up faster than the country can move its crude abroad.
Oil moves the global economy, and it usually finds a buyer somewhere. But even in a world that always needs energy, there are moments when supply runs into a wall. That is the situation now facing Russia.
Falling exports
Analysts from Kpler and Rystad Energy told Reuters that Russian oil storage is close to full capacity, according to Digi24. The pressure comes from falling sales to India, which became the biggest buyer of seaborne Urals crude after the war in Ukraine pushed Russia to shift exports east. India cut its imports sharply in January. It went from buying an average of 1.7 million barrels per day last year to just 1.1 million. That drop left about 150 million barrels sitting at sea with nowhere to go.
Russian exports fell as well. In February, shipments dropped to about 2.8 million barrels per day, down from 3.4 million in January. The country’s onshore storage can only hold around 32 million barrels in total. That amount covers just a few days of production, and half of that storage is already full. With so little space left, Rystad Energy expects Russian producers to cut output by roughly 300,000 barrels per day by early spring.
Cutting output
Some relief may come from the pipeline system run by Transneft. The network can store an estimated 100 million barrels. Even so, that is only equal to about 11 days of national production. The strain is already showing. According to Bloomberg sources, Russian producers cut output by 100,000 barrels per day in December and another 26,000 in January.
The industry is producing below its OPEC+ quota even though the agreement now allows higher limits. Production is at 9.28 million barrels per day, which is 300,000 below the quota. By the end of 2025, Russia’s total annual output fell to a 15-year low.
Lower exports hurt earnings as well. Companies like Rosneft and Lukoil face steep discounts and rising logistical costs. Analysts estimate that Russian producers lost around $33 billion in foreign income due to weaker demand and large price cuts. Urals crude now sells for about $40 per barrel. The Russian budget assumes $59, and some banks say the government needs closer to $93 to balance its books.
Oil and gas revenue for January 2026 dropped to the lowest level since the pandemic. Analysts warn that companies will struggle to maintain investment and dividends under these conditions.
Sources: Reuters, Digi24
