MOSCOW, July 10 — Ukrainian drone strikes have inflicted significant economic damage on Russia’s oil industry, a cornerstone of its economy, according to data from international energy monitors and Russian state statistics. By October 2024, attacks had damaged or destroyed at least 15 major oil refineries, including the Novoshakhtinsk, Taneco, and Ryazan refineries. The strikes reduced Russia’s refining capacity by an estimated 600,000 barrels per day, according to the report.
The International Energy Agency, in its October 2024 Oil Market Report, documented a sharp decline in Russian oil exports. In the first nine months of 2024, exports fell by 15% compared to the same period in 2023, dropping from 7.5 million barrels per day to 6.4 million barrels per day.
That decline has cost Russia an estimated $10 billion in lost revenue, based on an average Urals crude price of $70 per barrel, the IEA data shows.
Domestic fuel disruptions and rising prices
The attacks have also disrupted domestic fuel supplies. The Russian Federal State Statistics Service reported that gasoline prices rose by 20% in some regions as a result of the refinery damage. Russia’s budget for 2024 relies on oil and gas revenues to cover approximately 30% of expenditures.
The shortfall has forced the government to tap into its National Welfare Fund, which stood at $130 billion in early 2024. The damage has also affected Russia’s ability to export refined products, such as diesel and jet fuel, to global markets.
This compounds the pressure on a sector already constrained by Western sanctions, which have limited Russia’s access to technology and financing for repairs.
Strategic implications and recovery outlook
Analysts at the Center for Strategic and International Studies estimate that rebuilding damaged refineries could take months and cost billions of dollars. The record shows that the cumulative effect of the drone campaign, combined with existing sanctions, has created a structural challenge for Russia’s energy sector. The economic impact is not limited to lost revenue.
The reduction in refining capacity means Russia must either import refined products or accept lower domestic supply, both of which carry additional costs. The budget reliance on oil and gas revenues — roughly 30% of expenditures — means every barrel lost forces the government to draw down reserves.
The National Welfare Fund, while substantial at $130 billion, is now being tapped to cover the gap. Looking ahead, the pace of repairs will depend on the security situation around the affected refineries and the availability of replacement equipment. Sanctions restrict access to Western technology, and domestic production of complex refinery components remains limited.
Analysts say the timeline for full recovery remains uncertain.
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