Russian economy meltdown as crude exports plummet with 'production in turmoil'

Putin is facing a growing economic crisis (Image: Getty)

Russian exports of crude oil have hit a two year low, as the economic crisis in the country continues to intensify. Oil and gas exports are a major source of income for the Kremlin, providing the federal budget with billions of pounds.

Data shows that fossil fuel sales account for an astonishing 30% of state income and help pay for the Kremlin's brutal war in Ukraine. However, the Russian economy's lifeline has taken a major hit, as exports plummet and vital revenues dry up.

Tankers are being loaded up with less oil (Image: SCF Group)

According to the latest financial figures, 4-week average flows dropped by 170,000 barrels/day to 3.24 million, dragging export values down 4% to US$1.2 billion (£844m) per week.

Kyrylo Shevchenko, a former head of Ukraine's National Bank, noted: "Despite OPEC+ output hike, Moscow's focus on price over volume signals production struggles."

Bloomberg also reported that tankers loaded 5.6 million fewer barrels of Russian crude in the seven days leading up to June 1 than they had done the previous week.

It comes as the OPEC+ group voted again at its most recent meeting to increase oil production.

The eight members of the wider group decided to raise output by 411,000 barrels per day (bpd) in July, the third straight month of the same increase.

Increased oil production is bad news for the Kremlin, as it is likely to drive down further the price of a barrel.

A senior British military adviser noted the Russian economy was facing increasing turmoil as the war drags on into its fourth year.

Lieutenant Colonel Joby Rimmer told a meeting of the OSCE in Vienna last week that the Kremlin had lost a staggering £330 billion in energy revenues due to sanctions.

He noted that defence spending had ballooned to £109 billion and now made up 40% of the Russian government's spending in 2025.

The senior army officer said that for the first time in post-Soviet history, defence spending now exceeded social spending.

The Kremlin is preparing to raise gas prices for industry to offset losses at Gazprom, which has also seen exports plummet since Russia’s full-scale invasion of Ukraine in February 2022.

Last year the energy giant posted an eye-watering net loss of 1.076 trillion roubles (£9.5bn).