The IEA has cut its 2026 and 2027 Russian crude output forecasts as Ukrainian drone strikes cripple energy infrastructure, with August production suggesting Russia may be heading toward its lowest output in roughly 17 years. The squeeze on Russian supply is compounding a broader refined-products crunch that commodities strategist Jeff Currie says could push US gasoline to $5 a gallon before the November midterms.
The International Energy Agency cut its 2026 Russian crude output projection by 125,000 barrels per day to 8.7 million bpd, while slashing the 2027 forecast by a steeper 235,000 bpd to 8.6 million bpd. The agency points to an escalating campaign of Ukrainian drone strikes targeting the energy infrastructure that keeps Russia's oil output running.
August production data makes the picture starker. Russian crude output averaged just 8.36 million bpd that month, dropping 200,000 bpd from July and 695,000 bpd compared with the same month last year — figures that suggest Russia could be heading toward production lows not seen in roughly 17 years.
Death by a thousand drones
Ukraine's strikes on Russian refineries and energy sites, hitting regions including Saratov and Yamalo-Nenets, have shifted from occasional disruption to a systemic problem. Western sanctions make repairs harder still, since replacement parts and specialized refinery equipment are difficult to source when most industrial suppliers won't do business with Moscow. Russia has responded with temporary export bans on diesel and other refined fuels to shore up domestic supply, a move that also cuts into its export revenue.
A data black hole
Moscow hasn't released official oil output data since April 2023, so every current estimate, including the IEA's, relies on satellite imagery, shipping data, and other indirect indicators. Russia remains the world's third-largest crude oil producer, but output in June ran approximately 900,000 bpd below its OPEC+ quota.
Refined products feel the squeeze
The tightening extends beyond crude. Real Macro founder Jeff Currie said on September 11, 2026 that US gasoline prices have an extremely high probability of hitting $5 per gallon before the November 3 midterm elections, with the national average near $4.27 to $4.29 a gallon in mid-September. Currie points to the 3-2-1 crack spread, which he says is at multi-decade highs, with diesel crack spreads exceeding $100 per barrel, as refinery outages and the erosion of Russian refining capacity squeeze gasoline and diesel supply harder than crude benchmarks alone show. Diesel has already climbed to roughly $5.80 to $5.90 per gallon nationally.
Currie also points to currency debasement as a compounding force, arguing that a weaker dollar lifts dollar-priced commodities even without any change in physical supply or demand. Higher pump prices would also feed directly into headline inflation readings at a delicate moment for policymakers.
Sources: Crypto Briefing, Crypto Briefing
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