Russia running out of low-cost oil fields — energy expert

He shared the information on Espreso TV.

"Russia’s oil industry is currently facing a very serious problem. In addition to losing the highly liquid European market, they are now dealing with falling prices — something completely unexpected for them, as they believed everything would go well under Trump, but it’s turning out differently. In fact, their state budget was based on the assumption that the price of a barrel of oil would be around $70. But in reality, the current price of Urals oil is just slightly above $50. So we can see that the budget deficit caused by this price drop could increase by several trillion Russian rubles, which is indeed quite critical for Russia’s military budget as well, since it too is shaped by oil prices and oil sales," he said.

Volodymyr Omelchenko noted that Russia is running out of oil fields where extraction can be done with low costs. Most remaining fields have production costs exceeding $30 per barrel.

"Moreover, it should be considered that the production cost of Russian oil varies across different fields. They are running out of those fields where oil could be extracted with minimal expenses, and now, mainly, they are left with 70% of hard-to-extract fields, where the production cost exceeds $30. Additionally, there is the complex logistics of delivering oil to international markets, having to bypass sanctions, which also adds extra costs," said the energy expert.

• On April 15, it was reported that Russia's oil revenue had fallen to its lowest level since mid-2023, as exports have decreased for the third consecutive week, and oil product prices are falling amid the trade war between the U.S. and China.
• On April 17, the Czech government announced that after more than 60 years, the country had become independent from the Druzhba pipeline and had finally rid itself of dependence on Russian oil.
• On April 26, Andriy Zakrevskyi, Deputy Director of the Association of Energy and Natural Resources of Ukraine, noted that the price of Brent oil would be $60 per barrel by the end of this year.