Russia is facing a growing oil glut as storage facilities fill up and exports slow sharply, raising the risk of deeper production cuts and further pressure on the Kremlin’s budget.
According to Reuters, citing data from Kpler and Rystad Energy, Russia’s oil storage capacity is nearing its limits amid mounting problems selling crude abroad – particularly to India.
India, which had become the largest buyer of seaborne Russian Urals crude, cut imports by around one-third in January to 1.1 million barrels per day, down from an average of 1.7 million last year.
As a result, roughly 150 million barrels shipped from Russian ports are now effectively stranded at sea.
The slowdown is already hitting export volumes. Russian oil exports in February are estimated at about 2.8 million barrels per day, down from 3.4 million in January.
On land, Russia can store only about 32 million barrels – just three to four days of current production. Satellite data analyzed by Kpler shows roughly half of that capacity is already in use.
With storage running out, producers may have little choice but to shut in wells. Rystad Energy estimates Russia could be forced to cut output by about 300,000 barrels per day by March or April.
Russia’s vast pipeline network operated by Transneft offers limited relief. While pipelines can hold up to 100 million barrels, that equals only around 11 days of production – far from a long-term solution.
Production cuts have already begun. Sources cited by Bloomberg say Russian oil output fell by 100,000 barrels per day in December and another 26,000 in January, based on classified government data.
The decline is happening despite Russia still having room under its OPEC+ quota. While Moscow is allowed to pump 9.57 million barrels per day, actual production is closer to 9.28 million – about 300,000 barrels below the limit.
By the end of 2025, Russian oil production dropped to a 15-year low of 512 million tonnes, the Moscow Times reported.
According to Gazprombank, oil companies lost roughly $33 billion in export revenue due to logistics problems and deep discounts that in some cases reached nearly $30 per barrel.
Urals crude – Russia’s main export grade – is now trading at around $40 per barrel. That is far below the $59 price assumed in the federal budget and even further from the roughly $93 per barrel needed to balance it, according to Alfa-Bank.
As a result, oil and gas revenues have plunged. In January 2026, budget income from the sector fell to 393 billion rubles – about half the level recorded a year earlier and the lowest since the COVID-19 pandemic.