Thepetroleum or oil industry in Russia is one of the largest in the world. Russia has the largest reserves and was the largest exporter ofnatural gas.[1] It has thesixth largest oil reserves, and is one of the largest producers of oil.[2]
Russia is the main transit country for oil fromKazakhstan.[3] Until 2022 Russia was by far the world's largestnatural gas exporter.
In 2008, the Russian oil industry claimed to be in need of huge investments.[4]
Russia has seen extracting oil and gas from the Arctic region as important, especially for theLiquefied natural gas industry in Russia which was given a major boost from 2017 with investment and tax incentives, mainly toNovatek, however foreign investors pulled out in 2022 following theRussian invasion of Ukraine, with technology and key machinery essential for the operations coming under sanctions.[5]
TheRussian invasion of Ukraine started with Russia restricting gas supplies to Europe to try to stop assistance going to Ukraine. It resulted in the closure ofNord Stream 1, the refusal to activateNord Stream 2, the closure of thepipeline through Poland and the reduction of gas in thepipeline through Ukraine. It did not succeed and gave Gasprom severe economic problems.[6]
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,[7] including the introduction of a novelprice 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.[8] This was followed in 2023 with sanctions and a price cap onRussian oil products, and the EU introducedsanctions on natural gas.
As part of the sanctions, anembargo of importing ship-borne Russian crude and refined oil was introduced by the EU,G7 countries and Australia beginning in December 2022, with a few exceptions for a limited time period.[9][10]
In May 2023 Lukoil completed the sale of itsPriolo 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.[11] In October 2023 Bulgaria attempted to force Lukoil to sell itsLukoil Neftohim Burgas refinery.[12]
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.[13]
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.[14]
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, especiallyChina andIndia, to replace lost European markets.[15] 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 offUkrainian drone attacks.[16] In January 2024, Ukrainian drone strikes hit at least four oil and gas terminals across Russia, including theTuapse oil terminal on the Black Sea coast and theUst-Luga oil terminal on the Baltic Sea coast. Ukrainian journalistIllia 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."[17]
Transneft, which pumps 90% of Russian oil, reported that 2023 crude oil exports were:
Overall exports were down 6.5% in 2023 and over 90% of sales went to China and India.[18]
In March 2025, U.S. PresidentDonald 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."[19] In June 2025, a majority ofUS senators supported secondary sanctions against Russia that would impose 500% tariffs on countries purchasing Russian oil, gas, uranium, and other export goods.[20]
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.[21][22]
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 theDruzhba pipeline were struck interrupting its operation. An oil depot nearSochi airport and fuel trains close to the front lines have been struck as well.[22][23][24]
By 28 August 2025 Ukraine's campaign to strike at Russia's petroleum industry had hit ten oil refineries and was estimated byReuters to have disrupted Russia's refinery capacity by at least 17% or 1.1 million barrels a day.[25] The effect was afuel crisis in Crimea and both southern and far eastern regions with price surges and dry gas stations.[26] In September 2025 theInternational 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.[27] Acknowledging Russia's strained energy system presidentVladimir Putin pointed to Russia'scoal reserves to offset its gas shortage, insufficient infrastructure and under-developed grid economy.[28]
Following an attack on theTuapse oil terminal in early November 2025 theKyiv Post cited a source in theSecurity Service of Ukraine for a claim that the attacks on Russia's petroleum industry is a deliberate effort to reduce Russia's income from oil exports that contributes to funding its war in Ukraine.[29]
The biggest Russian oil company isRosneft followed byLukoil,Surgutneftegaz,Gazprom Neft andTatneft.[30] All oil trunk pipelines (exceptCaspian Pipeline Consortium) are owned and operated by the state-owned monopolyTransneft and oil products pipelines are owned and operated by its subsidiaryTransnefteproduct.[citation needed]
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