Why Russian Oil Refining Is a Legitimate Target of War

The war will not end when Ukraine liberates Donbas, Zaporizhzhia and Kherson regions, nor will it end when Crimea is liberated. The shelling of Ukrainian energy and civilian infrastructure can resume at any time, even if we imagine the impossible — finding an on-paper compromise with Putin’s regime to end hostilities. The war will end only under one condition — when Russia runs out of oil in Russian oil pipelines and refineries.

In 2023, according to Bloomberg, Russian budget revenues from the export of oil and oil products amounted to $99.3 billion, in addition to about $60 billion from the sale of oil products on the domestic market. That is, oil revenues to the state treasury of the occupying country are more than one and a half times higher than its entire official military budget. It should also be remembered that oil is the blood of war, which feeds the Russian army to the tune of tens of millions of dollars every day. Thus, the destruction of a critical part of Russia’s oil and gas complex is a much more reliable “peace agreement” than the conclusion of any treaty, which, as has been known since the time of Bismarck, is worth no more than the paper it is written on.

During Russia’s full-scale aggression, Ukraine has already lost up to 60% of its generating capacity as a result of massive missile and drone attacks and the occupation of the Zaporizhzhia NPP, thermal, solar and wind power plants. It should be clearly understood that even the most powerful air defence systems and the best physical defences cannot provide credible protection to energy infrastructure in the long term from regular massive attacks by the Russian Aerospace Forces.

Given all these factors, Ukraine’s top military and political leadership made the only right decision in this situation — to move hostilities to the enemy’s strategic depth to hit the oil refining industry as a legitimate target of war. After Ukrainian UAV strikes hit Novatek’s large petrochemical complex on the Baltic Sea in Ust-Luga on 21 January 2024, a new phase of the war began, opening up a real prospect for its end on fair terms. Russian attacks on the Ukrainian energy sector are no longer unpunished.

For example, the first test strikes on Russian refineries and the oil supply system were carried out in May 2023. Back then, Ukrainian drones attacked the Ilskiy refinery in Krasnodar Krai and the Afipskiy refinery in Kuban. However, the Security Service of Ukraine, the Main Intelligence Directorate of the Ministry of Defense and the Special Operations Forces began their work against Russian oil refining at the beginning of this year. Between 21 January and 23 March, at least 12 oil refineries and petrochemical plants and four oil depots located in the strike zone up to 1,200 km from the Ukrainian border were successfully attacked.

In particular, such giants of Russia’s oil refining industry as Lukoil-Nizhegorodnefteorgsintez and the Ryazan refinery with a capacity of 17 million tonnes of oil per year each suffered significant damage. The second largest refinery in Russia by refining volumes, Kirishinnefteorgsintez (20 million tonnes of oil annually), was also attacked, but the damage was not as severe. In addition, it is worth noting the successful attack on the Tuapse refinery, which processes light, high-quality crude oil to produce petroleum products for export.

According to Bloomberg and the head of Ukraine’s Security Service, Vasyl Maliuk, Russian oil refining lost 12% of its total capacity, which is about 320 million tonnes per year, as a result of the UAV strikes. In total, there are about 30 large refineries and 80 mini-refineries in Russia, which in recent years have been processing an average of 270–280 million tonnes of oil annually, producing 40–45 million tonnes of petrol against a domestic demand of 38–40 million tonnes and 80–85 million tonnes of diesel against a domestic demand of about 40 million tonnes.

As we can see, the surplus of diesel fuel after the air strikes may persist for a long time, while problems with petrol in Russia should be expected soon, despite the government’s export ban effective from 1 March. At the same time, we should not have high expectations that the oil products market will be in crisis in the coming weeks. However, there are already some results of the refining cuts. First and foremost, this concerns the 50% increase in exchange prices for motor fuel in January – March. However, retail prices are being kept stable by administrative means, but it is unrealistic to avoid a rise in petroleum product prices at petrol stations in the coming months.

Russia's oil supply system is quite resilient, especially with regard to diesel fuel. The oil refining industry is able to use unused capacities, and oil companies are able to increase oil supplies to Belarus and produce oil products for the Russian market. At the same time, there has been an increase in Russian oil exports to 10% in February – March, which roughly coincides with the lost refining capacity.

To create a real crisis on the Russian oil market, the Ukrainian Defence Forces should continue to attack the enemy’s refineries with maximum intensity for at least four to five months, destroying 8–10 primary processing units per month. Today, more than 60% of all refinery capacities in the European part of the Russian Federation are within the range of Ukrainian UAVs. In my opinion, the first priority should be to concentrate on the most modern and powerful refineries within striking distance and to hit again the still intact facilities of the already attacked refineries, paying particular attention to the Kirishinnefteorgsintez refinery and adding the Moscow refinery to the list of new targets.

One of the most vulnerable and at the same time important types of refinery equipment is the ELOU-AVT crude oil treatment and primary processing unit. It is difficult to protect because the distillation column is as tall as a 12-storey building. The cost of this equipment can reach up to $1 billion, and its restoration can take more than 14 months. The purpose of the distillation column is to separate oil into fractions, from light hydrocarbon gases and petrol to heavy distillates and tar.

In my opinion, a further plan to destroy the key infrastructure of Russia’s oil and gas complex should include a comprehensive approach. This means that, while continuing the UAV operations against refineries, strikes against Transneft’s main oil pipeline system, namely the main oil pumping stations, should also be on the “menu.” The decommissioning of basic gas compressor stations designed to create the regulatory pressure for transporting gas from Western Siberian fields to the European part of the Russian Federation can finally “calm” the enemy down.

If this plan is successfully implemented, the total losses for the Russian economy will reach a critical level, but with almost no civilian casualties. After serving the fair “karma,” there will be no need to urge the Kremlin leadership to end the war, as it will no longer have the resources to continue it. In fact, after the first results of the Ukrainian UAVs’ work, the Russian leadership should have understood all the consequences of the undeclared war it has unleashed, but common sense is not one of its virtues.

Every day it is becoming increasingly obvious that the main battlefield in this bloody war, after the frontline has stabilized, is energy. Whoever has the fuel and energy complex that can hold out longer will win. In this context, air defence systems, electronic warfare, attack drones, missiles, the extent of sanctions on the aggressor’s energy resources, as well as the ability to manage the energy system and quickly restore it, are of crucial importance.

Instead, the White House is for some reason concerned about the effectiveness of Ukrainian drone attacks on legitimate Russian military targets. This is probably due to Washington’s illusion that it is possible to reach a compromise with the Kremlin in the next six months to end hostilities in the absence of strong military pressure on it and an effective sanctions policy. It is difficult to find another explanation, because in fact, Ukrainian attacks cannot affect the price of oil in any way, as a reduction in oil refining in Russia does not reduce supply on the global market. These are obvious facts.

It seems that Washington’s strategists are trapped in the zugzwang of their own conservative thinking, which is as follows. On the one hand, it is absolutely unacceptable to provide Ukraine with so many weapons while simultaneously tightening sanctions so that the Kremlin loses or is weakened to the point of being unable to maintain the country’s integrity. This will lead to chaos in the nuclear power and significantly strengthen the main strategic enemy of the United States, which is China. On the other hand, Putin’s regime is not going to stop in its revanchist intentions, which threaten to destroy the entire world order that has developed over the past almost 80 years under Washington’s leadership.

The way out of this trap is seen by some US officials as a slow and “unobtrusive” push for a realpolitik-style “compromise” with Ukraine due to its resource constraints and political deterrence, as it is much more difficult to force Moscow to return to the international legal framework. However, such a short-sighted position only serves to whet the geopolitical appetites of Putin’s chekist team and makes the strategic trap even more inescapable.

Read this article in Ukrainian and russian.