Jens Asbjørn Bøgen
Ten of Russia’s biggest refining facilities were among the targets.
Ukraine is conducting a massive campaign aimed at crippling the Russian economy by targeting oil and gas revenues.
According to Bloomberg, May saw the highest monthly total of Ukrainian strikes on Russian energy sites, with at least 30 strikes confirmed.
And Ukraine’s strategy is working, as Russia is now facing a very real risk of fuel shortages.
A relentless campaign
The strategy is focused on causing deep, lasting economic pain. Of those drone attacks, 16 hit refineries, pounding eight of the country’s ten largest refining facilities.
Kyiv is hitting the same places over and over to stop workers from making quick fixes. For instance, the Yanos facility was struck three times in May, while two Lukoil plants each took two hits.
Recently, another strike forced the Volgograd refinery to halt operations completely, and the Saratov refinery suffered fresh damage after being hit for a second time.
Targeting complex gear
The physical damage reveals a major change in tactics. Drones have stopped targeting simple processing units and are instead targeting complex secondary systems.
These high-tech systems help factories produce gasoline and diesel. Fixing them is incredibly difficult because Western trade restrictions prevent Russia from buying the necessary parts from abroad.
The damage is showing up in the numbers. According to Bloomberg, analytics company OilX estimated that Russian refining dropped to 4.58 million barrels per day in May.
That is a drop of 700,000 barrels from last year, pushing production down to levels not seen since October 2009.
Squeeze at the pump
While official station prices look stable, wholesale markets tell a darker story.
Available volumes of premium AI-95 gasoline shrank to a third of last year’s levels, while wholesale prices jumped by more than 20 percent. Independent fuel stations are already finding it difficult to buy stock.
The Kremlin, however, insists everything is fine. Kremlin spokesman Dmitry Peskov blamed the decline on seasonal maintenance, dismissing any risk of a fuel shortage.
Still, reality on the ground looks different. The occupied Crimean Peninsula has already limited fuel sales, and this decline comes just as Middle East tensions have forced Russia to boost crude exports due to shipping disruptions in the Strait of Hormuz.
Sources: Bloomberg, OilX, RBC-Ukraine
