Global Supply Pressures Mount as Russia's Output Falls, U.S. Targets Iran

Russia’s crude oil production is declining and faces increasing constraints from attacks and sanctions, a situation that could underpin global prices crucial to Bakken operators, according to a new analysis. Rystad Energy has revised its Russian crude production forecast to average 8.95 million barrels per day (bpd) in 2026, before declining to around 8.6 million bpd in 2027, according to a report from OilPrice.com. This represents a decline of 90,000 bpd from its previous forecast.

The revisions reflect the continued impact of renewed disruptions at western Russian export terminals and rising risks to seaborne exports. Furthermore, the increasing frequency of drone attacks is now constraining Russia's upstream sector. "The impact of these attacks is becoming increasingly difficult for Russia's upstream sector to absorb," the Rystad Energy analysis stated. With onshore crude inventories already high, the nation has little scope to absorb further supply shocks, making sustained production cuts increasingly difficult to avoid.

Separately, Rigzone reported that several regions of Russia are facing fuel shortages again after Ukraine resumed almost daily attacks on oil refineries. The refinery issues compound the upstream challenges. Refinery runs in June and July were among the lowest in two decades, and throughput is forecast to average around 4 million bpd from July to December—almost 30% below the 2016-2023 seasonal average, according to the OilPrice.com report citing Rystad Energy.

Meanwhile, the United States is preparing to intensify pressure on another major oil producer. The U.S. will soon unveil "unprecedented sanctions" on Iran, according to a separate Rigzone report. Treasury Secretary Scott Bessent said the move will be part of a 'one-two punch' that includes the continued blockade of Iran's ports.

For Bakken operators and North Dakota royalty owners, these simultaneous developments highlight mounting global supply-side pressures. While a projected global oil surplus in 2027 is expected to pressure benchmark prices, according to the analysis of Russia's situation, current and imminent disruptions from two major producers could provide a countervailing force. Any sustained reduction in global supply or increase in geopolitical risk premium directly supports the price of crude, which is the lifeblood of the Williston Basin. The specific challenges in Russia—including unreliable exports, high inventory levels limiting flexibility, and infrastructure attacks—point to a tighter near-term supply picture than previously anticipated. Combined with a new U.S. sanctions regime on Iran, the global market is facing multiple points of potential constriction, a factor that will be closely watched by shale producers as they plan drilling budgets.