Russian Oil Exports Disrupted
On June 24, 2025, Russia’s crude oil exports plunged to a two-month low, dropping by approximately 220,000 barrels per day to around 3.19 million barrels/day, due to maintenance at the Kozmino Pacific terminal coinciding with slowdowns at the Baltic port of Primorsk. This sudden reduction exposes vulnerabilities in Russia’s export infrastructure, particularly relevant amid ongoing sanctions targeting its oil and energy revenues. Although elevated global oil prices—buoyed by Middle East tensions—helped maintain Russian weekly revenues near $1.38 billion, the disruptions impact Russia's capacity to fund its war efforts in Ukraine, potentially constraining military expenditures if sustained.
Major buyers like India and China, which remain key customers despite Western sanctions, might temporarily turn to alternative suppliers, unsettling established trade relationships. Economically, the loss of exports tightens global oil supply dynamics, possibly triggering higher global fuel prices and inflationary pressures. Domestically, Russia responded by increasing refinery processing to a near-record high of 5.42 million barrels/day, underscoring attempts to mitigate external vulnerabilities and maintain economic stability.
Base Case Scenario (60%)
Russian exports recover gradually following the completion of maintenance and infrastructure improvements. Export levels stabilize, moderately supporting war funding while global oil prices remain elevated but stable. Major buyers like India and China retain Russian supply, though slightly diversify sourcing, reducing Russia's strategic leverage but not significantly affecting overall revenues. Inflationary pressures ease slightly but remain elevated, prompting steady renewable investment shifts.
Upside Scenario (20%)
Russia rapidly resolves infrastructure issues, significantly boosting exports above pre-disruption levels, capitalizing on continued global oil price strength. Enhanced revenues bolster military financing, reducing pressures on the war effort. Buyer confidence, particularly from India and China, strengthens, reinforcing market positions and stabilizing global supply dynamics. Inflationary pressures ease considerably, and renewable investment momentum slows marginally in the short term.
Downside Scenario (20%)
Maintenance disruptions extend or recur frequently, severely constraining export volumes. Revenues decline significantly, weakening Russia’s capacity to sustain military funding and amplifying domestic economic challenges. Major importers accelerate diversification away from Russian crude, substantially eroding market share. Global oil prices spike, exacerbating global inflationary pressures, and accelerating a substantial shift towards renewables. Domestically, severe resource reallocations towards military and infrastructure exacerbate social instability.
