“The burning shall continue”: What lies behind Ukraine's attacks on Russia's oil refineries, and how have they impacted the Kremlin?

Will Ukraine continue to attack Russian oil infrastructure, and how could this affect the war? With each passing day, the intensity and frequency of Ukrainian drone attacks against Russian oil refineries increases. Since the beginning of this year (2024) alone, more than ten major oil refineries and depots have been damaged, some of them enduring multiple strikes.

The main goal of these attacks is to reduce the capability of the military, as fuel from Russian oil refineries is transported to Ukraine where it powers hostile tanks, infantry fighting vehicles and aircraft.

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This also causes the Russian economy to suffer, which reduces the ability of the Kremlin war machine to conduct attacks on residential buildings and kill civilians. According to Ekonomichna Pravda, it is highly likely that mysterious drones will continue to attack Russia's oil infrastructure in the future, causing further destruction and damage to the aggressor. How does this affect Russia's economy and oil industry?

Where are the drones hitting?

Russia has about 30 large oil refineries and dozens of small ones.

The aggressor country produces more than 530 million tonnes of oil per year, about 280 million tonnes of which are processed at domestic facilities. "Ironically, Putin was the one who, during his time as prime minister, contributed to the development of the oil refining sector and scaled it up significantly - all of which he has now undone with his invasion of Ukraine, nullifying his past economic achievements. First, Western sanctions were imposed upon Russian oil refining, and now the industry is a legitimate target for Ukraine's Defence and Security Forces," says Oleksandr Sirenko, an analyst at the Naftorynok consulting company.

Since the beginning of 2024 alone, dozens of Russian refineries and oil depots have been attacked by drones.  "In some places, they struck fuel tanks, and in other cases, the refineries were shut down for several months due to the destruction," says the source in the Ukrainian parliament.

Large-scale attacks on Russian oil refineries began in 2023. In May, drones attacked the Ilsky oil refinery in Krasnodar Krai and the Afipsky oil refinery in Kuban Oblast, and in July, an "explosive device" detonated at the Kuibyshev oil refinery in the city of Samara.

Fuel storage facilities were also frequently targeted. Since the beginning of 2024, the intensity of attacks on Russian oil refineries has increased. Damage was reported at refineries and oil depots in the Yaroslavl, Oryol, Volgograd, Tuapse, Klintsy, Ust-Luga, Ryazan, Bryansk, Belgorod, Rostov, Nizhny Novgorod and Leningrad oblasts and the city of St Petersburg.

Attack objectives

The first objective of the attacks on Russia's oil refining infrastructure is strategic in nature.

"Russian oil refineries are a legitimate target of the Security Service of Ukraine and Defence Intelligence of Ukraine," says a source in Ukraine's Defence and Security Forces. Attacks target military facilities or those contributing to Russia's defence, such as ones that supply fuel to Russian military equipment: tanks, infantry fighting vehicles and aircraft that fire missiles at Ukrainians.

"War is about provision and supply. Seeing the aggressor's oil refining industry being hit directly affects their ability to wage war," says Andrii Yusov, a representative of the Defence Intelligence of Ukraine.

"Russians cannot protect all facilities from drones.

At the same time, every powerful strike deep into Russian territory gives the country a reason to pull back air defence systems from the front and helps the Ukrainian military," explains a source in Ukraine's Defence and Security Forces.

Read also: Sanctions targeting Russian oil are falling apart. What will the West do? The second objective is economic. "The oil refineries not only provide fuel for Russian troops, but are also a key source of income for the nation, which has at times been described as a 'gas station masquerading as a country'.

Russia uses the money from oil and gas sales to fight and kill Ukrainians," said an Ekonomichna Pravda source in one of the defence departments. According to him, the attacks affect both the volume of oil products exported by the Russian Federation and the cost of fuel on the domestic market, as we will elaborate upon later. The third objective is psychological, and morale, or the lack thereof, can be the deciding factor between victory and defeat.

The military and media effects of the attacks are obvious, but what about the economic impact?

How strikes affect Russian refining

The nature of Russian media coverage of the attacks on oil refineries and depots can vary, from reports of "damage caused by falling UAV wreckage" to frank admissions that critical infrastructure has been taken offline. The consequences for the Kremlin's oil refining industry depend on the actual extent of the damage. "Oil refineries are large industrial facilities that are difficult to completely disable with a single strike, even a well-targeted one.

They include several production lines and crude oil can be rerouted to still-functional lines when others are disabled. Therefore, it is still difficult to accurately assess the consequences of the attacks," says Serhii Kuiun, Director of A-95 Consulting Group. Earlier, Bloomberg reported that the oil refineries attacked in recent days account for 12% of Russia's refining capacity.

Market participants interviewed by Ekonomichna Pravda emphasise that in this case, the figure refers to the theoretical production capacity of these facilities, and the share of actual refining stopped by the strikes may differ. "There is currently not enough information to definitively evaluate the extent of the damage and predict when the affected facilities will resume operations. We can say that the latest attacks will affect the total refining volume in Russia by a few percent at most," says an Ekonomichna Pravda source in one of the energy companies.

Energy expert Hennadii R?abtsev said that the latest attacks have slightly reduced refining volumes, but their weight in the balance sheet should not be overestimated. "These are spot strikes; they are painful and affect logistics, but they do not significantly impact annual total refining volumes," he says.

The good news is that most Russian refineries were built using Western equipment. This equipment was purchased before sanctions were imposed, which makes it much more difficult and time-consuming to repair the attacked facilities.

Another positive development is that following the strikes on oil refineries, petrol prices in Russia have reached RUB 60,000 [approx. US£650.40] per tonne, the highest in six months.

The value of non-diesel fuels on the stock market is also rising.

If strikes continue at their current rate, Russia will be forced to follow up its ban on the export of refined petrol with a similar prohibition on shipping diesel overseas.

This rise in fuel prices was triggered by reports of damage at oil refineries alone. If these reports turn out to be true, with severely damaged equipment forcing refineries into a prolonged shutdown, prices will head for new highs. "Attacks on primary oil refineries would have the biggest effect, as it is impossible to produce petrol, diesel or jet fuel without them," Riabtsev said.

According to him, the attacks have not had a critical impact on the industry so far, but if they continue to be launched and accurately hit their targets, everything could change. Are new attacks on Russian refineries possible? "We cannot disclose all the details of our special operations, but we can say that we consider enemy military facilities, military infrastructure and war criminals to be legitimate targets. We are not going to stop.

Our objective is the victory of Ukraine, so the 'cotton' in Russia has been burning, is burning and will continue to burn," Vasyl Maliuk, Head of the Security Service of Ukraine (SSU), said in a comment to Ekonomichna Pravda. ("Cotton" is a humorous reference to Russian propagandists' refusal to use the usual word for an explosion, "vzryv", in media reports, instead euphemistically using the term "khlopok", which can mean either "thunderclap" or "cotton".)

Translation: Nikol Tomyshch, Alina Us

Editing: Ben McBride