Russia natural gas production (red) and exports (black).Russian crude oil production (red) and crude oil exports (black).
The petroleum or oil industry in Russia is one of the largest in the world. Russia has the largest reserves and was the largest exporter of natural gas.[1] It has the sixth largest oil reserves, and is one of the largest producers of oil.[2] It is the fourth largest energy user.[3]
In 2009, Russia produced 12% of the world's oil and had a similar share of global oil exports.[4] Russia produced an average of 10.83 million barrels (1,722,000m3) of oil per day in December 2015.[5] This goes mainly to the European market.
Russian exports consist of more than 5Mbbl/d (790,000m3/d) of oil and nearly 2Mbbl/d (320,000m3/d) of refined products, The domestic demand in 2005 was 2.6Mbbl/d (410,000m3/d) on average.[6] It is also the main transit country for oil from Kazakhstan.
Until 2022 Russia was by far the world's largest natural gas exporter. Most, but not all, authorities believe that Russia has the world's largest proven reserves of natural gas. Sources indicating Russia have the largest proven reserves include the US Energy Information Administration (47.8 tcm),[7] and OPEC (48.7 tcm).[8]
Investment
In 2008, the Russian oil industry claimed to be in need of huge investments.[9]
Russia has seen extracting oil and gas from the Arctic region as important, especially for the Liquefied natural gas industry in Russia which was given a major boost from 2017 with investment and tax incentives, mainly to Novatek, however foreign investors pulled out in 2022 following the Russian invasion of Ukraine, with technology and key machinery essential for the operations coming under sanctions.[10]
Sanctions were imposed by the USA, the EU and other nations, to forbid or reduce the importation of gas, oil and associated products from Russia,[12] including the introduction of a novel price cap on crude shipped oil, designed to allow Russia to maintain production but limiting the revenue from oil sales. From 5 December 2022 the price cap has been set at US$60 per barrel.[13] This was followed in 2023 with sanctions and a price cap on Russian oil products, and the EU introduced sanctions on natural gas.
In May 2023 Lukoil completed the sale of its Priolo Gargallo refinery in Sicily, as it was no longer able to import Russian crude oil and the plant was configured to only process the Russian Ural grade oil.[16] In October 2023 Bulgaria attempted to force Lukoil to sell its Lukoil Neftohim Burgas refinery.[17]
A US Treasury report in May 2023 highlighted that Russian oil exports were continuing to rise, providing stability in the world market, as planned, whilst Russia's revenue was being restrained by the price cap to $5–6 billion per month, compared with $8–15 billion a month in 2022. Russia has changed their tax rules to levy more tax on oil producers to help offset falling revenue, to the detriment of investment. Market participants and geopolitical analysts now acknowledge that the price cap is accomplishing both of its goals.[18]
Gas production in Russia has fallen, as gas exports which in 2021 were 185 bcm, have fallen in 2023 by around 70% with the loss of the European market.[19]
Russia has sought means to get around the sanctions including investing heavily in hundreds of old tankers, to transport crude oil to new markets in the Far East, especially China and India, to replace lost European markets.[20] G7 sanctions keep being adapted to restrict Russia's options and keep Russia's revenues below the $60 per barrel price cap level for crude oil whilst keeping the oil flowing.
In December 2023 the Russian government ordered oil and gas producers to install anti-drone protection at their installations, to ward off Ukrainian drone attacks.[21] In January 2024, Ukrainian drone strikes hit at least four oil and gas terminals across Russia, including the Tuapse oil terminal on the Black Sea coast and the Ust-Luga oil terminal on the Baltic Sea coast. Ukrainian journalist Illia Ponomarenko said that "Russia finances its military from oil exports. You can't persuade countries like India and China to stop buying it. So you knock out Russian oil refineries."[22]
Transneft, which pumps 90% of Russian oil, reported that 2023 crude oil exports were:
China via pipeline 40 million tons; no change
Black Sea via tankers 30m tons; +3.1%
Baltic Primorsk via tankers 44.4m tons; +6.5%
Baltic Ust-Luga via tankers 34m tons; +9.0%
Pacific Kozmino via tankers 42.8m tons; +9.4%
Druzhba pipeline to Europe −10m tons; -60.0%
Overall exports were down 6.5% in 2023 and over 90% of sales went to China and India.[23]
In March 2025, U.S. President Donald Trump threatened "secondary sanctions" on imports from countries buying Russian oil, saying: "That would be that if you buy oil from Russia, you can’t do business in the United States. There will be a 25 percent tariff on all oil, a 25 to 50-point tariff on all oil."[24] In June 2025, a majority of US senators supported secondary sanctions against Russia that would impose 500% tariffs on countries purchasing Russian oil, gas, uranium, and other export goods.[25]
Following historic high domestic prices on gasoline and in a bid to support summer travel and grain harvesting Russia imposed an export ban on gasoline for August and September 2025.[26][27]
In August 2025 Ukraine intensified their attacks on Russia's oil industry, striking at least seven oil refineries in e.g. Novokuibyshevsk, Syzran, Ryazan and Volgograd reducing Russia's refining capacity by an estimated 13%. Also two oil pumping stations of the Druzhba pipeline were struck interrupting its operation. An oil depot near Sochi airport and fuel trains close to the front lines have been struck as well.[27][28][29]
By 28 August 2025 Ukraine's campaign to strike at Russia's petroleum industry had hit ten oil refineries and was estimated by Reuters to have disrupted Russia's refinery capacity by at least 17% or 1.1 million barrels a day.[30] The effect was a fuel crisis in Crimea and both southern and far eastern regions with price surges and dry gas stations.[31] In September 2025 the International Energy Agency stated that Russia's revenues from oil product exports had in August declined to five-year lows, contributing to Russia's economic slowdown.[32] Acknowledging Russia's strained energy system president Vladimir Putin pointed to Russia's coal reserves to offset its gas shortage, insufficient infrastructure and under-developed grid economy.[33]
↑ Overland, Indra. "The Hunter Becomes the Hunted: Gazprom Encounters EU Regulation". In Anderson, Svein; Goldthau, Andreas; Sitter, Nick (eds.). Energy Union: Europe's New Liberal Mercantilism?. Blasingstoke, UK: Palgrave MacMillan. pp.115–130.
↑ Woodruff, Yulia (2006). "Russian oil industry between state and market". Fundamentals of the global oil and gas industry, 2006. Petroleum Economist. ISBN978-1-86186-266-2.
↑ US Energy Information Administration, International statistics, retrieved 1 December 2013.
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