MOSCOW, July 13 — Russia’s oil exports declined by 10% in 2024 compared to the previous year, according to the International Energy Agency. The drop is partly attributable to Ukrainian drone strikes on refineries. Russian crude oil and product exports averaged approximately 4.5 million barrels per day in 2024, down from 5 million barrels per day in 2023.
The price of Urals crude averaged $65 per barrel last year, below the $70 per barrel price cap set by the G7 in December 2022. The Stavropol Krai oil depot hit on 19 March 2025 is one of over 20 such facilities attacked since 2022.
These strikes have also increased insurance costs for Russian oil shipments.
Economic growth slows as military spending rises
Russia’s GDP growth slowed to 2.5% in 2024, down from 3.6% in 2023, as estimated by the World Bank. The country’s budget deficit widened to 2.3% of GDP in 2024, driven by increased military spending and reduced energy revenues. The combination of lower export volumes, reduced oil prices, and higher defence expenditure has placed significant strain on federal finances.
The 10% decline in oil exports marks a tangible shift in Russia’s primary revenue stream. Energy exports have long served as the backbone of the federal budget, and the sustained pressure from both price caps and infrastructure attacks is reshaping the economic landscape.
Ukrainian drone operations have targeted refinery and storage infrastructure across multiple regions since 2022. The Stavropol Krai depot attack is among more than 20 such incidents recorded. These strikes disrupt processing capacity and add costs to the logistics chain for Russian crude and products.
Insurance costs for Russian oil shipments have risen as a direct consequence of the attacks, further compressing margins for traders and producers. The G7 price cap mechanism, which sets a $70 per barrel ceiling for Urals crude, continues to limit the revenue Russia can generate from each barrel sold using Western shipping and insurance services.
With the price of Urals crude averaging $65 per barrel in 2024, the cap has been binding for much of the year. The gap between the cap level and the actual market price reflects both global supply dynamics and the discounts buyers demand for Russian oil. The World Bank’s estimate of 2.5% GDP growth for 2024, while still positive, represents a marked deceleration from the 3.6% recorded in 2023.
The slowdown correlates with the narrowing of export revenues and the growing share of state spending diverted to military purposes. Looking ahead, the trajectory of Russian oil exports will depend on several factors: the evolution of drone strike campaigns against energy infrastructure, the willingness of buyers to accept Russian crude under the price cap regime, and the broader global oil market balance. The budget deficit, now running at 2.3% of GDP, will require either additional borrowing, spending cuts, or a recovery in energy revenues to stabilise.
