Russia close to cutting oil output due to Ukranian drone attacks

Transneft, Russia’s oil pipeline monopoly controlling over 80% of extracted oil, warned producers of potential output cuts after Ukrainian drone strikes hit critical infrastructure. At least 10 refineries, reducing refining capacity by nearly a fifth, and Baltic Sea ports Ust-Luga and Primorsk sustained damage.

Transneft restricted oil storage in its pipeline system, signaling further risks. The attacks, intensified since August, target Russia’s energy sector, which funds one-third to half of Moscow’s budget.

With Russia accounting for 9% of global oil production, output reductions could disrupt global supply chains.

Transneft declined to comment on the damage or its impact on exports.