Hard-to-reach oil now makes up most of Russia’s remaining reserves

Russia has fueled its invasion of Ukraine for more than three and a half years by keeping oil flowing, but the lifeline is drying ￰0￱ war and Western sanctions are making it harder to pull crude from already declining ￰1￱ project at least a 10% drop in output by 2030, a major threat to the Kremlin’s economy built on petrodollars, according to figures shared in public by the Russian Energy Ministry and industry ￰2￱ managed to keep oil production and exports steady at the start of the conflict by maintaining old fields instead of investing in new ￰3￱ tactic is hitting its ￰4￱ to one-third of Russia’s budget comes from energy profits, a figure expected to shrink as output ￰5￱ before the war, Soviet-era fields in Western Siberia and the Volga-Urals region were running ￰6￱ turned to harder-to-recover crude in Arctic and Siberian zones, but that option is now blocked by sanctions and ￰7￱ loses technology and talent in oil sector Russian majors once planned to tap Siberian shale with techniques used in Texas and North ￰8￱ plan collapsed after sanctions cut off access to needed ￰9￱ Kremlin raised taxes on oil companies to fund the war, further straining the ￰10￱ labor has thinned as young men joined the frontlines with large soldier packages, died in combat, or fled the ￰11￱ Donald Trump, now in the White House, has intensified pressure on Vladimir Putin to halt the ￰12￱ even a sudden end to war and sanctions would not fix the ￰13￱ Sagers of S&P Global Commodity Insights said, “Getting oil out of the ground is harder and more expensive but the deteriorating resource base means you have to run faster every year just to stay in place.

It’s essentially a long, slow goodbye for Russian oil.” The Energy Ministry reported that hard-to-recover reserves will rise to 80% by 2030, from 59% ￰14￱ Minister Pavel Sorokin said at a conference last year, “This means that both capital and operating costs to bring this resource out of the ground will grow.” Daria Melnik, vice president at Rystad Energy, added, “The golden era of Russia’s giant conventional oil fields is in the past.” Russia struggles with equipment shortages and rising costs Sanctions have stripped Russia of the specialized equipment needed for drilling, transporting, and ￰15￱ operators lack modern software to analyze wells and rock ￰16￱ existing programs have been blocked from updates since 2022, leaving them ￰17￱ also lack drill sensors that provide real-time readings of rock layers, fluids, and ￰18￱ Neft chief executive Aleksandr Dyukov said last year the company was missing around 200 items necessary for extraction and ￰19￱ set a target to eliminate the shortage by ￰20￱ also lacks enough ice-strengthened tankers to carry Arctic oil and ￰21￱ controls blocked access to foreign-built ships, parts, and ￰22￱ in South Korea canceled Russian orders, and domestic yards have not replaced them ￰23￱ reserves shrinking, the cost of every barrel rises because the remaining crude is harder to ￰24￱ has pushed costs even ￰25￱ routed through third countries is more ￰26￱ labor crunch raised wages for oil ￰27￱ basic materials like sand, used to keep cracks open in fracked wells, cost more.

“Everything is more expensive,” Sagers said. “All these pressures at home make it very hard for Russia to raise production even in the near term.” Get seen where it ￰28￱ in Cryptopolitan Research and reach crypto’s sharpest investors and builders.