More pain for Russia’s beleaguered oil industry today as new drilling statistics paint yet another bleak picture, with new drilling facing another big drop. The drop ion newly commissioned wells again accelerated. now down 12.3% year-on-year from January-November 2024, according to a report by Kommersant on Thursday.
The sharp decline in new well launches and operational drilling in Russia may be attributed to rising drilling costs, production limitations under the OPEC+ agreement, and falling crude prices, the newspaper reported.
The most significant drop in new well commissioning was recorded by Tatneft, which reduced activity by 1.7 times compared to the previous year. Lukoil commissioned 21.9% fewer wells, Rosneft decreased by 10.4%, and Gazprom Neft by 3.6%, according to sources familiar with the statistics cited in the report.
As if the almost daily Ukrainian drone strikes weren’t enough, this trend paints a bleak picture for Russia’s oil sector, as the combination of higher costs, reduced market demand, and international production restrictions puts increasing pressure on the industry. This slow slowdown in production is likely to continue and as Putin’s domestic credibility is now tied to offering his slaves a constant supply of foreign atrocities, the Russian war machine may soon be unable to afford itself.