A critical shortage of storage capacity and a sharp decline in sales are putting the Russian oil industry in a difficult situation.
Russia is approaching the depletion of oil storage capacity amid growing difficulties for oil companies selling crude to India. This is reported by The Moscow Times, Dengi.ua, and PromPolitInform.
India, the largest buyer of seaborne cargoes of Urals crude, reduced its imports by a third in January, to 1.1 million barrels per day, compared to an average of 1.7 million last year. As a result, approximately 150 million barrels shipped by tankers from Russian ports are stuck at sea, and overall Russian oil exports have begun to decline: in February, they amounted to approximately 2.8 million barrels per day, compared to 3.4 million in January.
Russia’s above-ground storage capacity only allows it to store approximately 32 million barrels, equivalent to just 3-4 days of current production. According to Kpler satellite imagery, approximately half of this capacity has already been used. Transneft’s pipeline network, which can hold approximately 100 million barrels (approximately 11 days of production), could partially address the problem of unsold crude, but even this resource is limited.
The inability to store the excess will force oil producers to cut production by approximately 300,000 barrels per day by March-April. The production decline has already begun: according to Bloomberg data from people familiar with classified statistics, production fell by 100,000 barrels per day in December and by another 26,000 in January.
As a reminder, we previously reported that average retail gasoline prices in Russia have already exceeded US levels. We also previously reported that, as of the beginning of 2026, China has completely stopped purchasing electricity from Russia, including even the minimum volumes stipulated by the contract, which is approximately 12 MW.
