By Ali Elias
Russia faces mounting challenges in its oil sector, with experts warning of a sharp decline in both its long‑term viability and immediate operational stability.
Shrinking Reserves and Investor Retreat
The Foreign Intelligence Service of Ukraine reports that Russia possesses approximately 13.2 billion tons of economically viable, proven oil reserves—a figure that would sustain production for only 25 years at current extraction rates. Nearly 96% of the subsoil fund is already allocated, indicating that almost all discoverable oil fields are under development.
This near-total exploitation has corresponded with a dramatic decline in investor interest. According to 2024 auction data, one-time payments for hydrocarbon extraction rights amounted to a mere US $50 million, a sum only half that generated by gold mining—an industry far less critical to national budget revenues. Analysts interpret this as a red flag, signaling that further exploration opportunities will likely be exhausted within 10–15 years, a situation exacerbated by limited capital and insufficient technology to access Russia’s remaining hard-to-reach reserves.
Oleg Kazanov of Rosnedra corroborated this bleak outlook, noting that out of an estimated 81.6 billion tons of possible oil resources, only the 13.2 billion tons are economically extractable — about 16% of the total. Despite modest additions from exploration of old Soviet-era fields, Russia’s ability to sustain future output remains doubtful.
Escalating Fuel Crisis Amid Ukraine’s Drone Campaign
At the same time, Ukraine’s drone strikes are taking a toll on Russia’s refining and export infrastructure. According to Reuters, recent attacks have disrupted at least 17% of Russia’s oil refining capacity, equivalent to about 1.1 million barrels per day. These strikes, targeting refineries, export terminals, and pipelines, have caused gasoline shortages in southern Russia, Crimea, and the Far East and triggered domestic fuel price hikes and rationing in some areas.
The Guardian adds that this months-long campaign has intensified seasonal fuel pressures, with widespread station queues and price surges—such as a 54% increase in A‑95 petrol since January—reported across various regions. Similarly, AP News and the WSJ highlight how regions like Crimea and Siberia have resorted to rationing while facing spiraling wholesale prices.
Strategic Implications
These developments reveal a dual-front challenge for Russia’s petroleum sector: long-term resource exhaustion and immediate operational disruptions.
Long-term risks: With few new reserves being found and existing fields depleted, production is likely to decline absent major investment and advanced extraction technologies.
Current vulnerabilities: Ukraine’s intensified drone campaign underscores Russia’s fragile refining ecosystem. The inability to rapidly repair and maintain damage due to sanctions compounds the issue, threatening fuel access for civilians and industrial users alike and putting pressure on government budgets.