ANALYSIS: Ukraine’s Drones vs. Russia’s Energy Industry

Since launching a bombardment campaign aiming to damage and take offline as much Russian oil processing capacity as possible, Ukrainian long-range strike planners have seen their strategy succeed and, after two months of attacks, clear signs of the Russian retail fuel market weakening.

Following a few weeks of probing attacks and strikes against Russian air defense systems, Ukraine’s unmanned aircraft, army military intelligence and special operations forces, on Aug. 2, kicked off a campaign using long-range drone strikes targeting mostly Russian oil refineries.

Since then, per Kyiv Post tallies, Ukrainian kamikaze drone aircraft have launched at least 55 identifiable attacks against Russian fossil-fuel processing infrastructure, with the longest strikes hitting facilities 1,500-1,700 kilometers (930-1055 miles) away in Russia’s Perm and Baskhorstan oil-producing regions. Some Ukrainian strikes are not publicized, and the Russian state represses information about damage caused by the strikes, so the actual number is probably greater.

Aircraft quantities and types have varied from mission to mission, but on average, Ukrainian strike planners seem to have launched between ten and 20 aircraft at a single target and at least the same number of aircraft into airspace approaching the target, either as decoys or a saturation attack tactic. Ukraine’s unmanned aircraft forces routinely attack more targets than Russian oil refineries; the biggest known Ukrainian attack with drones against Russia probably took place on Aug. 2, when Russia’s defense ministry claimed its forces shot down at least 332 encroaching aircraft in a night of air combat.

The kamikaze robot planes themselves have been relatively modest in size, comparable to a light single-engine recreational aircraft and, often, much smaller, carrying no more than 200 kilograms (440 pounds) of explosives and usually much less.  However, the Ukrainian drone pilots have, throughout the bombardment campaign, concentrated strikes on refinery cracking towers that are hard to fix quickly and, because of US and European energy sanctions, difficult to source parts for.

The numbers driven by the explosions:

Practically every Russian energy industry indicator and data point is pointing to contraction, reduced capacity, and the market expectation that supply will fall further.

Probably the most important is the unofficial, market estimate of how much Russian oil processing capacity Ukrainian drone strikes have taken offline. In early September, after a month of Ukrainian attacks, traders and overseas analysts were estimating the Russian Federation’s capacity to process crude oil into product had already fallen by 17-25%. A month later, the most common estimate was 38-40%.

With approximately three-quarters of Russia’s entire oil processing capacity located within the 1,800-2,000 kilometer (1,120-1,240-mile) maximum range of Ukrainian long-range robot aircraft, the bottom line appears to be that after two months of strikes, Ukraine has managed to knock offline about every second Russian oil refinery it can hit – and with follow-up strikes kept it offline. Some refineries have been hit three times in the past two months.

Equally important, politically for the Kremlin, is that retail prices for automobile fuel have shot up across Russia 20-30%, with spikes up to 40% reported in far-flung markets.

On the St. Petersburg Exchange, Russia’s highest-profile energy products trading market, in September, gasoline trading volumes fell by 5%, fuel sales by 1.4%, summer diesel by 11%; and prices increased by 5%.

According to findings by the energy industry research group Siala, reported in Russian media in early October, total Russian gasoline and diesel fuel production fell by 6% in August, another 18% in September, and about 70% of that capacity loss was caused by Ukrainian drones blowing up pieces of the Russian energy production infrastructure.

The most damaging strikes hit and stopped production at the Kinef refinery (Russia’s second biggest) and the Ryazan refinery (fifth biggest). Gasoline supply to the Russian retail market is, because of that capacity reduction, about 20% less than the market is demanding, Kommersant news magazine reported.

Longstanding Russian market regulation law prohibits increasing the price of a major consumer product like retail fuel faster than the official monthly inflation rate, currently declared by the Kremlin at 8% annually. Most economists estimate real Russian price inflation is at least twice that.

Because of lost production capacity, market analysts say, the gap opened over the past two months between Russian retail market demand, and Russian fuel production capacity to supply product to that market, is about 20%.

Which Has Meant for Russian Motorists:

Stress, wasted time, and more money paid at the pump.

For average Russians, Ukraine’s strikes throughout much of the war have not been particularly visible because most Russians don’t live within eye- or ear-shot of an oil refinery in range of a Ukrainian drone, and Russia’s state-controlled media downplays or simply ignores hits on refineries and pumping stations taking place daily.

However, millions of Russian citizens either operating vehicles or needing them for transportation have directly experienced fuel shortages in the past 60 days, or sat in an automobile queues stretching kilometers, driven up with a near-empty tank to a close filling station or even, drawn fuel rationing coupons.

Russian regions without substantial economic and political clout have been the most affected. By and large, regions with better-educated, more urban populations that the Kremlin would wish to keep working and off the streets protesting, like the major cities Moscow, St. Petersburg and Krasnodar, have seen price rises but steady supplies of gasoline and diesel.

By practically all accounts, the worst-off Russia-controlled region is the occupied Ukrainian territory Crimea, home to 2.4 million, where peninsula fuel stations ran out of product for more than a week in late September. Occupation authorities on Monday promised the problem would be resolved “in a few days.” Stations re-opened on Wednesday, selling fuel at some of the highest prices in the Russian Federation, initially limiting sales to 30 liters a customer. On Thursday, the maximum allowed purchase per customer was reduced to 20 liters.

Spot shortages first were reported in remote Russian territories like Buryatiya opposite Mongolia, followed by the maritime provinces on the Pacific, Yakutia in north-eastern Siberia, Chukhotia next to Alaska, the Japan-claimed Kurile and Ukraine’s Russia-occupied Luhansk region. As supplies have run low, spiking wholesale prices and fuel station shut-downs have rippled into Russia’s central industrial heartland, hitting Ryazan, Nizhny Novgorod, Saratov, Samara, Ulyanovsk, Penza, Rostov, Voronezh, Kursk, and Belgorod.

As this article was being prepared the latest reports in Russian media of new shortages were from the Moscow-Kazan highway, and of 80-90% of fuel stations closed for business in Khabarovsk region.

Can the Kremlin Stabilize the Situation?

It doesn’t look very likely.

Absent major deliveries of air defense equipment from China or another ally, Russia, faced with the task of closing the world’s biggest airspace to increasingly sophisticated Ukrainian strikes, is probably unlikely to defend itself better against future drone attacks.

Throughout the war, Ukraine’s drone forces command has made Russian air defense systems a top targeting priority ahead of, even, Russian energy infrastructure, combat forces, and military material. In more than three years of combat, the only Russian targets Ukraine’s national leadership has committed more resources towards eliminating if the opportunity presents itself, than Russian air defenses, have been major Russian warships, Russian army headquarters thought to be hosting meetings of general officers and senior staff, and Russian politicians or military personnel considered by Kyiv responsible for war crimes. Future Ukrainian attacks against Russian air defenses are a near-certainty, as are more waves of drones flown through gaps broken in those defenses.

Kremlin spokesmen have argued the Ukrainian drone attacks are pinpricks and that Russia’s mighty air defense network swats down all hostile aircraft. During a Sept. 26 Moscow meeting with his Belarusian counterpart, Aleksandr Lukashehnko, Putin said: “Ukraine’s drones reaching our heartland, like the refinery near St. Petersburg, show the West’s desperation. It’s impossible to believe they’d risk direct confrontation, but if they do, our forces are ready to finish the job.”

The Russian state, meanwhile, seems less confident of Russian energy market stability and Ukrainian drones’ capacity to affect it in the coming months than Putin was at the press conference.

On Sept. 30, the Kremlin imposed, effective until the end of 2025, a near-total ban on exports of diesel, and at the same time authorized imports of gasoline and diesel into Russia from China, Belarus, South Korea, and Singapore (a statement issued by Ukraine’s Unmanned Aircraft Command, issued in its end-of-month tabulation of strikes and claimed damage, pointed out that a fuel car train might be loaded with gasoline in Belarus or China, but for the fuel to reach market, it would have to transit rail lines overflown by Ukrainian attack drones.)

The Russian state, per an Oct. 2 Washington Post report, authorized adding methyl tert-butyl, a potential cancer-causing agent banned in Russia since 2016, to domestically produced gasoline, and imposed fuel rationing in occupied Crimea and the Far East.

State price controls on retail fuel prices, thought by most Russia observers to be a Kremlin priority to reduce public antagonism towards the state, have been the main engine behind the shortages. On Sept. 23, spokesmen for the Russian Fuel Union, an industry body representing smaller fuel retailers in Russia, in comments to Medusa, said that the wholesale price of gasoline and diesel sold by producers to Russian fuel station operators is higher than the maximum allowed retail price.

The Russian energy market observer Evgen Istriben, in a Sept. 30 analysis, reported that imported gasoline and diesel, which is not subject to domestic fuel price limits, would be available at 90 rubles/liter or higher; about 15-20% more than retail prices in most Russian markets. The Russian state’s imposition of price controls, making domestically manufactured automobile fuel too expensive to retail, carries the risk of a near-collapse of the country’s fuel station network, because 60% of Russia’s fuel stations are independently-operated, he said.

The main Russian government retail price control agency, the Federal Antimonopoly Service (FAS), on Oct. 1, appeared unwilling to accept market forces, issuing nationwide warnings to fuel station operators against “unjustified price hikes.”

Is Ukrainian Capacity to Hit Russian Oil-Processing Maxed Out?

It looks like the Ukrainians are still a good distance from peak strike capacity.

The number of long-range drones produced in Ukraine is a military secret. The most common estimate is around 3,000 aircraft a month. Ukraine, throughout its war with Russia, has been highly dependent on Western weapons, but that is not the case with drones. Of the long-range drones Ukraine currently produces, based on open-source imagery and reports of what’s hit a Russian refinery, the majority are a pusher propeller aircraft called a UJ-26 Bobr or the longer ranged An-126 Lyutiy, some very long-ranged strikes have been carried out by a modified single-engine prop plane called an FP-1, and a few air raids were flown by a turbojet-powered bat-wing drone called a Peklo.

A multi-national assistance effort launched in the early years of the war, called the Drone Coalition, allocated about $1.95 billion towards Ukrainian drone acquisition in 2024, and the figure rose to $3 billion in 2025. The UK and Latvia chair the group now with 20 members, with the biggest announced contributions coming in 2025 from Denmark ($1.5 billion), the US ($800 million) and the Netherlands ($540 million). This money mostly supports Ukrainian drone manufacturing with component and production equipment purchasing, along with deliveries of small numbers of Western aircraft.

Ukrainian President Volodymyr Zelensky, during an Oct. 1 meeting with national and international drone manufacturers, said his government had secured contracts for 1.5 million drones in 2025, with a particular emphasis on enhancing “long fist” capabilities. Aside from the operational UJ-26, FP-1, An-126, and Peklo, Ukrainian manufacturers have demonstrated new drones that are effectively cruise missiles, like the state-produced Ukroboronprom Palianiytisia system, a cheaper, shorter-ranged weapon, and the privately produced Fire Point Flamingo system, a more expensive, longer-ranged weapon.

Supply chain gaps notwithstanding, most market observers say the critical problem for the future of Russia’s oil-processing industry is repairing refineries damaged by the Ukrainian drones faster than increasing quantities of Ukrainian drones can damage them.

World markets, for their part, seem less optimistic than Putin about the future of Russian energy product supplies outside Russia. Bloomberg in late September, citing cartel sources, reported the OPEC+ countries plan to increase production a collective 137,000 barrels per day, and that by 2026 the international market will see record supplies of crude – just less Russian product.