Ukraine drone strikes knock 25% of Russian refining offline, deepening fuel crisis

Ukraine's long-range drone campaign has knocked more than a quarter of Russia's refining capacity offline, forcing Moscow to ban diesel exports and ration gasoline across 56 regions as domestic fuel shortages deepen.

"A blistering wave of Ukrainian attacks has affected more than half of Russia's refining capacity since the start of May," the International Energy Agency said in a report on Friday, estimating Russian plants processed 3.8 million barrels a day in June, 1.6 million lower than a year earlier.

Russian crude-processing rates averaged 3.91 million barrels a day so far this month, the lowest since March 2005 and 1.4 million below the year-ago average, according to EA Analytics. Diesel and gasoil loadings from Russia plunged to 234,000 barrels a day from July 1 to 10, down from 400,000 in June and the 2025 average of about 817,000, Kpler data show. The supply shock sent US diesel futures surging 11% to $154 a barrel on Wednesday, while European gasoil futures hit a record premium of $60.77 a barrel to Brent.

The loss of Russian diesel — the world's second-largest exporter after the US — compounds a global market already tightened by disruptions to Middle East flows and post-pandemic demand growth. With US diesel inventories 6% below the five-year average and Brazilian and US Midwestern farmers competing for the same cargoes ahead of planting and harvest seasons, the supply squeeze threatens to push fuel costs higher across the global economy.

Drones Overwhelm Russian Air Defenses

In the past 100 days, Ukrainian forces have carried out about 50 attacks on Russia's fuel-producing facilities, hitting at least 24 of 34 large refineries, according to a Bloomberg tally. The strikes have reached as far as the Siberian city of Omsk, about 1,500 miles from Ukraine, where Russia's largest refinery was hit on July 7. Ukraine has deployed a growing arsenal of domestically produced weapons, including the Flamingo cruise missile with a 1,864-mile range and a 2,535-pound warhead, alongside long-range drones capable of penetrating deep into Russian territory.

Russia's air defense systems, built mainly to counter ballistic missiles and crewed aircraft, have struggled to intercept the drone swarms. The attacks have targeted key processing units built with Western-made technology that is difficult for Russia to replace, analysts say, compounding the damage.

Fuel Crisis Spreads Across Russia

The domestic fallout has been severe. By late June, fuel-rationing measures were in effect in 56 regions, according to Mediazona, an independent Russian media outlet. Some regions introduced temporary rationing based on vehicle license plates, while authorities in the Novosibirsk region recommended companies reintroduce remote working to reduce fuel consumption. Deputy Prime Minister Alexander Novak, who oversees Russia's energy industry, told local media last week that "there are problems and shortages, which is why we see queues or sometimes gas stations don't work stably."

The crisis has even driven Russians to search for homemade solutions: there were more than 17,000 searches for "how to make gasoline" on Russian search engine Yandex last month, the highest since the Kremlin's 2022 invasion of Ukraine, the Bell reported.

The last time Russia faced a comparable fuel-supply crisis was in the spring of 2023, when a combination of refinery maintenance and drone attacks on export-oriented plants pushed domestic gasoline prices to record highs and prompted a temporary ban on fuel exports. That episode lasted roughly two months before supply stabilized. The current crisis is more severe, with a larger share of capacity offline and attacks continuing at an accelerating pace.

This article is for informational purposes only and does not constitute investment advice.