As President Donald Trump has pushed to cut off Russian energy exports to end the war in Ukraine, new reporting suggests that Russia could be forced to slash its own crude oil output, ironically granting the president the outcome he has been searching for.
Several industry sources confirmed to Reuters on Tuesday that Russian oil pipeline giant Transneft has warned producers that it might have to cut back on output as a result of Ukraine’s drone strikes on energy infrastructure in the region.
Transneft, which controls more than 80% of all oil produced in Russia, has also reportedly begun to restrict producers’ ability to store crude in its pipeline system as a result of the Ukrainian attacks.
Ukraine launched a sweeping attack made up of around 361 drones over the weekend, striking several Russian oil refineries. Russian officials have not yet detailed the damage to the energy infrastructure following the attack. However, sources told Reuters that the recent attack cut the country’s refining capacity by nearly one-fifth.
If Russian energy infrastructure continues to sustain damage from future attacks, Transneft has reportedly warned that producers will need to accept less oil or cut output altogether.
Doing so would effectively cut off a major funding source for Russia’s war in Ukraine, which Trump has sought to depress through secondary tariffs and Western sanctions.
Last month, Trump imposed an additional 25% tariff on India over its purchases of Russian oil, raising total tariffs on the country to 50%. India is the second-largest importer of Russian oil after China.
The president has also called on NATO and the Group of Seven to impose secondary tariffs on China over its purchases of Russian energy, saying it would be “of great help” in ending the war in Ukraine. He specifically urged the European allies to place 50% to 100% tariffs on China.
As debate over possible increased sanctions and tariffs from the West continues, Ukrainian President Volodymyr Zelensky has dubbed Ukraine’s drone strikes on energy infrastructure as more effective.
“The most effective sanctions, the sanctions that work the fastest, are fires in Russian oil refineries, at their terminals and oil depots,” Zelensky said Sunday following the strikes.
THE UKRAINE WAR ACCELERATES THE INTERNATIONAL DRONE ARMS RACE
Russia currently accounts for around 9% of oil production worldwide, and any major supply disruptions could send prices skyrocketing.
International and domestic crude oil prices remained relatively stable on Tuesday, only increasing by less than 2%. Just before 4 p.m., Brent Crude inched up by $1.01 and was selling at $68.45 per barrel. Similarly, West Texas Intermediate increased by $1.22 and was priced at $64.52 per barrel.
