Russian Oil and Gas Industry Faces Challenges Amid Sanctions

Russian oil production fell by 0.8% despite western sanctions and Ukrainian drone attacks. The country remains a major oil producer, facing challenges such as international sanctions impacting its energy sector’s stability and growth targets. Liquefied natural gas production also fell short of expectations amid geopolitical tensions.

Russian oil production saw a decline of 0.8% last year, reaching 10.28 million barrels per day, as per recent data. This output accounts for around 10% of global production, despite facing a barrage of Western sanctions and Ukrainian drone attacks.

Russia, which ranks as the world's third-largest oil producer after the United States and Saudi Arabia, encountered difficulties resulting from international pressure aimed at destabilizing its wartime economy. Deputy Prime Minister Alexander Novak noted a slight decline in oil production to 512 million metric tons in 2025 from 516 million tons in 2024, though projections for future growth remain.

Challenges including U.S.-imposed sanctions on key Russian oil producers and volatility in the international energy market have hampered Moscow's long-term LNG ambitions. Russia's output of liquefied natural gas, totaling 32 million tons last year, missed expectations and has led to the postponement of ambitious annual production goals.

(With inputs from agencies.)