Ukraine escalates drone strikes against Russian oil infrastructure, exports down 10%

Ukraine has stepped up its drone strikes on Russia’s energy infrastructure with one of the most intense weekends of bombing that targeted refineries, pipelines and storage facilities in a campaign that has reduced oil exports by about 10%.

The number of refineries hit has doubled since the start of the year, according to Ukrainian reporting and market analysts. “The strikes, which also hit pipelines and storage facilities, have cut Russian oil production, putting pressure on Moscow's federal budget, where oil and gas taxes account for about a quarter of its revenue,” analysts note, reports UBN.

The scale of the disruption is esclating. Reuters estimates that Ukrainian attacks have knocked out 700,000 barrels per day of refining capacity across 16 refineries between January and May.

That damage is feeding through into export flows. Shipments of Russian oil products by sea fell to 7.77mn tonnes in April, down 9.8% from March and 17% year on year, reflecting both physical outages and logistical bottlenecks.

The strikes have also become more geographically ambitious. On the night of May 15, Ukrainian drones attacked and set ablaze the Ryazan refinery, one of Russia’s largest. Two days later, drones hit multiple sites in and around Moscow. According to Russia’s defence ministry, the targets included the Moscow refinery, the Solnechnogorskaya oil depot and several enterprises involved in microelectronics production.

The widening scope of the campaign suggests Kyiv is seeking not only to disrupt fuel production but also to raise the economic cost of the war for the Kremlin. Oil and gas revenues make up between 20% and 25% of Russia’s federal budget, even after Western sanctions and price caps redirected much of the country’s export flows towards Asia.

Until recently, Russia’s refining sector had proven relatively resilient, aided by rerouting of exports and state support. However, repeated strikes are beginning to expose vulnerabilities in infrastructure that is both geographically concentrated and, in some cases, ageing.

The loss of refining capacity does not necessarily translate directly into lower crude production, as Russia can redirect unprocessed oil for export. But it does erode margins on higher-value refined products such as diesel and gasoline, which have been a key source of revenue since the imposition of Western sanctions.

There are also signs of knock-on effects in domestic markets. Temporary shutdowns at refineries have, at times, tightened fuel supplies inside Russia, prompting the government to impose export restrictions in order to stabilise prices.

For Ukraine, the campaign represents a shift towards economic warfare, targeting the financial underpinnings of Russia’s military effort. For Moscow, it underscores the growing reach and effectiveness of Ukrainian long-range strike capabilities, even deep inside Russian territory.

Whether the pressure can be sustained — and whether it will materially alter Russia’s fiscal trajectory — will depend on the durability of Ukraine’s drone campaign and Russia’s ability to repair and harden its energy infrastructure. For now, however, the strikes are emerging as one of the more consequential — if less visible — fronts in the war.