Russian oil refining capacity has been significantly reduced due to a series of precision strikes by Ukrainian drones on military targets deep within Russian territory.
These attacks, which have targeted defense plants, rail hubs, and most notably, refineries, have resulted in soaring fuel prices and a growing domestic crisis.
The market price for a ton of AI-95 gasoline in Russia recently hit a record high of 77,000 rubles. While the Russian government has officially attributed the price increase to seasonal demand for agricultural machinery, this explanation is at odds with the steady 0.4% rise in retail fuel prices over the past two months.
The situation has become so critical that Russia’s government has banned gasoline exports to non-CIS countries as of August 1, with a broader ban on exports to Eurasian Union countries also under consideration.
In an effort to control the spiraling prices, Russian regulators have reportedly launched a “witch hunt,” investigating gas stations and oil companies for potential price collusion.
New regulations may also force major fuel companies to sell a larger percentage of their production (up from 15% to 17%) on the domestic market, a move that would force them to sacrifice profitable foreign sales.
The official narrative of “unfair price inflation” fails to address the underlying cause of the crisis: Ukraine’s targeted strikes on Russian refineries.
These Russian refineries are critical for two reasons: they provide fuel for Russian military vehicles and generate foreign currency through refined oil exports, which funds Russia’s war effort.
In early August, Ukrainian drones successfully hit several Russian refineries, collectively disabling facilities with a refining capacity of 40,000 tons of oil products per day.
The strikes specifically targeted the most vital parts of the refineries—the primary oil refining units—which are costly and time-consuming to repair, especially given international sanctions that limit access to necessary components and expertise.
The Ryazan Refinery lost two units, and the Novokuibyshevsk Refinery had one unit damaged, with repairs potentially taking up to six months.
However, the need for urgent repairs has left the country in a difficult position, as shortages and limited resources raise the risk of further breakdowns.
In addition to refineries, Ukraine has also been targeting Russia’s rail infrastructure.
While a number of different drone models are likely in use, the Ukrainian military has primarily relied on domestically produced, long-range drones for the attacks on Russian oil refineries and infrastructure.
While not a drone, it is part of Ukraine’s expanding long-range arsenal. It has a reported range of over 3,000 kilometers and is capable of carrying a larger warhead than the drones currently in use.
These domestically produced weapons are a key part of Ukraine’s strategy to bypass restrictions on using Western-supplied weapons for strikes inside Russia and to hit targets that are critical to funding and supplying the Russian war machine.
The recent Ukrainian drone attacks on Russian oil refineries have had a significant impact on global oil markets, though the effects are more nuanced than a simple rise in prices.
While these attacks are not causing a major supply-side shock to global crude oil, they are creating specific disruptions and increasing volatility in the market for refined petroleum products.
This strategic dilemma, brought on by Ukraine’s precision strikes, demonstrates how a smaller, more agile force can effectively target and disrupt the economic foundations of a larger military power, shifting the dynamics of the conflict.
