The people of Omsk, southern Siberia, might have thought the greatest danger to them were the midges that plague the city during the summer. Instead, another aerial threat, Ukrainian drones, hit the city’s oil refinery – the largest in Russia – on Tuesday as part of a campaign intended to drain the tanks of the Kremlin's war machine.
The Ukrainian approach has three main prongs: striking refineries more precisely, attacking ships that move fuel, and hitting the roads and rails that carry it to the front.
Earlier strikes were focused on fuel storage tanks, which explode impressively but are cheap and simple to replace, and on refineries’ central distillation columns, which are also relatively easy to fix, and where Russia had a surplus of capacity.
Now, the drones are hitting more sophisticated units: the hydrocrackers, reformers and fluid catalytic crackers that produce high-quality petrol, diesel and jet fuel. These take months to repair, and sanctions make it hard to source parts internationally that Russia cannot make itself. Ukraine is going back to the same plants again and again, damaging them as soon as they restart operations.
The technological game-changers are longer-range drones, some with AI targeting, and the new Flamingo cruise missile with its larger warhead. Drones saturate air defences so that the Flamingos can get through. Omsk is about 2,500km from the Ukrainian front lines, and sirens have sounded even in Khanty-Mansiysk, in the heart of western Siberia's oil-production zone.
Ninety per cent of Russia’s prewar refining capacity is now within Kyiv's reach. Those sites that are not – remote refineries in eastern Siberia and the Russian Far East – are poorly placed to supply the country’s main population centres.
Refining hit
The Omsk plant suffered a serious explosion in 2024, possibly an accident, but last week’s attack was the first clear drone strike on it. About 20 per cent of the country’s overall capacity is currently operational and within range.
Plants in places including Yaroslavl near Moscow, Perm in the Urals, Antipinsky in southern Siberia and Salavat in Bashkortostan can expect further attacks. Ukhtinsk, in far northern Russia, is probably the largest plant that is in range and has not yet been hit.
July refining output so far is more than 40 per cent below prewar levels, and petrol shortages have reached about 35 per cent of demand. Motorists rely on apps to find stations that still have supplies.
Shortages have spread across the country, reaching even the politically sensitive nerve centres of Moscow and St Petersburg. Diesel exports have been banned. Before the full-scale invasion in 2022, Russia exported more than one million barrels a day of the fuel, crucial for tanks, lorries, construction and farm machinery.
Even Russia’s crude oil production is being dented by the combination of strikes on refineries and export terminals. At nine million barrels a day in May, it was 700,000 bpd below its Opec+ quota.
Tanker war
The second prong of the offensive is shipping. Ukrainian media claimed 48 hits this month on vessels in the Sea of Azov, the semi-enclosed arm of the Black Sea north-east of occupied Crimea.
Many of the 100 ships that have been attacked are small, used for domestic fuel distribution or storage – a further blow to Russia’s logistics just as the harvest season approaches. Larger tankers were also damaged at the end of last week.
The third prong is Russian logistics, with two main objectives: cutting supplies to the front lines in south-eastern Ukraine, and isolating Crimea, which has been occupied by Russia since 2014.
Road tankers have been a particular target in Crimea, and the peninsula’s Kremlin-backed governor banned fuel sales to civilians on June 21.
Russia has some options. It could lean on the Mozyr refinery in allied Belarus, which the Ukrainians are unlikely to attack. It has weakened fuel standards, increasing supply availability but possibly damaging engines. Petrochemical plants can be reconfigured to produce low-quality, polluting petrol, as Iran has done before. Some drivers are converting cars to run on compressed natural gas, which Russia has in abundance.
Imports from further afield are logistically tricky. Neighbours such as Kazakhstan are themselves short of fuel. Ukraine has repeatedly attacked petroleum terminals on both the Black and Baltic seas, and has privately indicated it would consider imports from India a legitimate target. Alternative sources are also expensive, given the continuing competition for refined products while Gulf supplies are constrained.
A stalemate
This is the latest twist in a full-scale war that has already outlasted the Soviet Union’s fight against Nazi Germany. Ukraine is not only holding out, but landing effective counterblows. Even Russia’s minimal war aims seem far off.
Russia’s missiles continue to wreck homes, electricity systems and factories, and its defensive measures may improve and blunt the Ukrainian campaign against its petroleum industry. The return of winter will again test the resilience of Ukraine’s people in their frozen cities.
The Kremlin hopes the French and German elections next year will shift European politics in its favour, after a setback in April with the defeat of Hungary’s Viktor Orban. But growing economic damage, bringing the war home to ordinary Russians and fostering discontent, may yet push Moscow towards more genuine negotiations. A besieged Crimea may turn from asset to liability.
Wider implications
Second, this phase of the conflict interacts with the on-off tussle in the Gulf. Crude oil prices remain moderate despite the loss of some Russian exports, the latest spate of Iranian attacks on shipping, and Tehran’s attempts to assert control over the Strait of Hormuz. But oil product prices are staying high. The loss of Russia’s diesel, and its turn to petrol and jet fuel imports, will push up prices everywhere: European margins for refining crude to diesel have jumped to a record $60.17 a barrel.
Refinery attrition is spreading disruption beyond Russia’s borders. Landlocked Tajikistan, Kyrgyzstan and Mongolia source most of their fuel from Russia at discounted rates, and are now seeing shortages approach. Turkey and Brazil, the main buyers of Russian diesel, were joined in June by Egypt and Morocco.
Third, Ukraine’s new tactics point to wider dangers for oil infrastructure in any conflict zone. The Gulf’s refineries suffered some damage from Iranian strikes, mostly in Kuwait and Bahrain, though most appears readily repairable. Ukraine has supplied valuable intelligence to Gulf states on countering aerial attack. But after exhausting much of its stock of interceptors against Iranian missiles over the Gulf, the US has none to spare for Ukraine, which is increasingly exposed. Both attackers and defenders, no doubt, are watching and learning from this latest war of the refineries.
Robin M. Mills is chief executive of Qamar Energy and author of The Myth of the Oil Crisis
