Russian oil production continued its decline in May, marking the sixth consecutive month of falling output. This decrease is attributed, in part, to sustained Ukrainian drone strikes targeting Russian oil storage and transportation infrastructure. Despite the production decrease, Russia managed to increase its oil exports from 3.17 to 3.64 million barrels per day by rerouting crude through Baltic and Black Sea ports following recent restorations. However, the base for oil extraction taxes within Russia continues to shrink, indicating a broader impact on the sector. The increase in exports doesn’t offset the overall downward trend in production volume. This situation suggests a growing challenge for Russia in maintaining both production and revenue streams from its oil industry amidst the ongoing conflict. Analysts are monitoring whether this trend will continue and its potential impact on global oil markets.