Ukraine Intensifies Strikes on Russian Oil Infrastructure, Weakening Moscow’s Financial Capacity

Ukraine has escalated its attacks on Russian refineries and oil infrastructure, with over 30 strikes since early August. The objective is to undermine Moscow’s ability to finance its war against its neighbor. Russia, the world’s third-largest producer and second-biggest exporter of crude oil, relies heavily on oil and gas revenues, which accounted for about 30 percent of its budget in 2024.

The impact of Kyiv’s attacks has been significant, with Russian refinery production rates dropping around 10 percent, according to Homayoun Falakshahi, an analyst at energy research group Kpler. In response to the risk of shortages, Moscow has restricted exports of petroleum products until the end of the year and extended a ban on gasoline exports. Rystad Energy analyst Janiv Shah noted that Russia’s refinery production declined to an average of 4.9 million barrels per day by mid-September, a drop of about 400,000 barrels per day compared to the first half of 2025.

The scarcity of Russian refined products has led to a significant widening of the gap between the price of a barrel of Russian crude oil and that of refined products. As a result, retail gasoline prices in Russia have increased by 6.7 percent since the end of 2024, despite a sharp drop in the price of a barrel of crude oil over the same period.

In the long term, Russia’s situation is likely to worsen, as damaged infrastructure typically takes an extended time to return to normal operations. Additionally, revenue from Russian crude oil is expected to be affected by falling global prices, as markets anticipate abundant supplies in the coming months. SEB bank analyst Bjarne Schieldrop forecasts that the situation will likely become worse, with Ukraine becoming more effective at attacking Russian refineries, potentially leading to an end to exports of all Russian oil products and the introduction of domestic rationing.

International sanctions aimed at weakening Moscow have had limited impact, according to Adi Imsirovic, director of the Surrey Clean Energy consultancy. However, the withdrawal of Western oil companies from Russia has led to a decline in investment in the nation’s energy infrastructure, limiting its ability to increase crude output over the coming years. As the conflict continues, Ukraine’s strikes on Russian oil infrastructure are likely to have significant and lasting consequences for Moscow’s financial capacity and the global energy market.