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Ukrainian drone attacks on energy infrastructure cut Russia’s crude oil production by 200,000 barrels per day in August from the previous month, adding to pressure on output in the world’s third-largest oil producer, the International Energy Agency (IEA) said Friday.
Russian crude production fell to 8.4 million bpd in August, according to the IEA’s monthly oil market report. Output was 940,000 bpd below its January 2026 peak of 9.3 million bpd and 695,000 bpd below year-ago levels.
The agency cut its 2026 forecast for Russian crude production by 125,000 bpd to 8.7 million bpd. It also lowered its 2027 forecast by 235,000 bpd, with production now expected to average 8.6 million bpd.
Beyond the decline in Russian production, disruptions across major energy routes and infrastructure pulled global oil supply lower, with global oil supply falling by 1.6 million bpd in August to 100.1 million bpd.
The IEA highlighted that attacks on tanker routes and energy infrastructure in the Strait of Hormuz and Red Sea contributed to the decline.
Saudi Arabia accounted for much of the drop, with its total oil production falling by about 2.6 million bpd. Rising security risks also sharply restricted exports from the country’s western coast, pushing its crude supply down to 6 million bpd, the lowest level in more than 30 years.
OPEC+ production dropped by about 1.8 million bpd in August to 38.8 million bpd. Alongside Saudi Arabia’s production losses, restrictions on Iranian oil supplies linked to a U.S. naval blockade contributed to the decline.
Production outside OPEC+ increased by about 240,000 bpd to 61.3 million bpd, driven mainly by higher U.S. oil liquids output and increased production in the United Arab Emirates.
Oil supply from Gulf producers fell by about 2 million bpd in August to 21.9 million bpd, leaving production 10.1 million bpd below levels before the U.S./Israel-Iran war.
The IEA now expects Gulf production to recover in 2027 rather than this year. Global oil supply is forecast to average about 100.7 million bpd in 2026, down 5.7 million bpd from the previous year.
Supply is projected to rise by about 8 million bpd in 2027 as Gulf production recovers, reaching 108.7 million bpd.
The IEA also lowered its forecast for global oil demand this year by 940,000 bpd from its previous estimate, citing a lack of progress in U.S.-Iran negotiations, continued disruptions to Gulf oil exports and record-high fuel prices.
The agency expects global oil demand to fall by 2.5 million bpd from last year to about 102.4 million bpd in 2026, before recovering in 2027, when it is expected to increase by about 2.6 million bpd to 105 million bpd.
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