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Ukrainian drone strikes push Russian refining sector into deepening crisis – EnviroNews
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Russia’s oil refining sector is facing mounting disruption as intensified Ukrainian drone attacks have sharply reduced refinery operations, squeezed domestic fuel supplies and added pressure to the country’s finances, according to the latest assessment of global oil markets.
Russia, which has historically ranked as the world’s third-largest producer of refined oil products, operates 32 major refineries with approximately 6.5 million barrels per day (mb/d) of installed refining capacity.
However, refinery throughput fell to about 3.8 mb/d in June 2026, its lowest level in more than two decades and around 30 per cent below the same period a year earlier. Gasoline production was reportedly down by 20 per cent from 2025 levels, while diesel output was estimated to have fallen by nearly 30 per cent.
The deterioration has been linked to an intensification of Ukrainian drone strikes on Russian oil infrastructure. In the first eight months of 2026, a Russian refinery was hit approximately once every three days.
Ukraine has targeted Russian oil facilities since Russia’s full-scale invasion began in 2022, but the range and frequency of attacks have expanded considerably in 2025 and 2026.
One of the most significant attacks occurred on July 7, when drones struck Gazprom Neft’s 450,000 barrels-per-day Omsk refinery, Russia’s largest, located about 2,500 kilometres from the Ukrainian border.
Several refineries, particularly those closer to Ukraine, have reportedly been attacked as many as 15 times since 2022. By late August 2026, only five major Russian refineries had remained untouched by Ukrainian drone attacks. These facilities are located in eastern Siberia or the Far East, between roughly 3,500 and 6,500 kilometres from Ukraine.
The attacks are also becoming more targeted. Beyond crude distillation units, which perform the initial processing of crude oil, Ukrainian strikes increasingly appear to be focusing on secondary units such as fluid catalytic crackers, hydrocrackers, reformers and hydrotreaters.
These units are critical for producing higher-value fuels, including gasoline, diesel and jet fuel. While minor damage to a crude distillation unit can often be repaired within one or two weeks, serious damage to complex secondary units can require six to eight months to repair.
The Moscow refinery, with a capacity of 250,000 barrels per day, was reportedly so severely damaged in a June attack that it could remain offline until early 2027.
Russian refiners have attempted to sustain production by postponing scheduled maintenance, restarting mothballed units and accelerating repairs. However, repeated attacks could undermine refinery reliability and increase repair requirements, while Western sanctions constrain access to some specialised equipment.
Fuel shortages and rising prices
The refining disruptions have increasingly affected Russia’s domestic fuel market.
The government banned gasoline exports in April and introduced its first ban on jet fuel exports in June. On July 8, it imposed its first diesel export ban, a major shift for a country that had previously exported about half of its diesel and gasoil production.
The diesel restriction has been repeatedly extended and was most recently extended to September 30, with reports suggesting it could run through October.
Despite the measures, fuel shortages spread across Russia during the summer. By the end of June, shortages were reported in 92 per cent of the country’s regions, with about two-thirds introducing measures such as purchase limits and QR-code-based rationing. Some motorists reportedly faced waits of up to 40 hours at fuel stations.
Rosstat reported on August 26 that gasoline prices had risen by more than 19 per cent since the beginning of the year, while diesel prices increased by about 18 per cent.
Russia has also begun importing gasoline by rail and sea, with shipments reportedly arriving from Belarus, Kazakhstan, Morocco, South Korea, India and Türkiye.
To ease the supply pressure, the government temporarily relaxed fuel-quality and blending requirements, allowing older fuel specifications and alternative gasoline blends. However, the measures carry potential trade-offs for vehicle performance and emissions-control systems.
Wider impact on global diesel markets
The disruption is also being felt beyond Russia, particularly in international diesel markets.
Global seaborne gasoil and diesel exports averaged 4.7 mb/d during the first eight months of 2026, down 10 per cent year-on-year. Combined Middle Eastern and Russian diesel exports fell to an estimated 520,000 barrels per day in August, 75 per cent below the level recorded a year earlier.
Higher exports from the United States and a recovery in Asian shipments have provided only a partial offset.
The resulting market tightness has contributed to inventory declines, particularly in the United States, while diesel crack spreads – a measure of diesel profitability relative to crude oil – climbed above $100 per barrel in September in both the US Gulf Coast and Northwest Europe.
Meanwhile, Russia’s fiscal position is coming under additional pressure. Between April and August 2026, Russian oil companies received about RUB1.5 trillion ($18 billion) in subsidies, while overall fiscal revenues for January-August were almost 17 per cent below the previous year.
The country’s budget deficit reached RUB5.8 trillion in the first eight months of 2026, already exceeding the RUB5.6 trillion deficit recorded for the whole of 2025.
The International Energy Agency has consequently lowered its forecast for Russian refinery throughput to an average of about 4 mb/d for the remainder of 2026 and for 2027, reflecting uncertainty over the ability of damaged facilities to return fully to operation.
