Deep inside Russia’s home turf, on 18th June 2026, the Gazprom Neft Moscow Oil Refinery was struck for the second time within a week by Ukrainian drones. It was the largest drone attack on Moscow to date. Just 10 days later, Ukraine’s President Volodymyr Zelenskyy announced a formally authorised 40-day campaign targeting infrastructure, with simultaneous strikes on refineries in the Krasnodar and Yaroslavl regions. In Crimea, acute fuel shortages, rationing and a complete ban on public petrol and rationing followed. This intensification and escalation raise questions both tactical and strategic in nature. One wonders, can enough meaningful economic pressure, to limit Russia’s capacity to sustain the war, be generated by the systematic deep strikes undertaken by Ukraine?
Understanding the Attack
The Ukrainian campaign of striking targets deep inside Russia’s territory didn’t begin in June 2026; its foundation was being laid as far back as early 2024. Around that time, Ukraine began targeting oil refineries that would come within the range of its drones. As August 2024 rolled in, the Ukrainian strike campaign escalated to broader infrastructure of export such as pipelines, storage, terminals, and port facilities. Furthermore, in late 2025, the campaign extended itself to cover Russia’s shadow fleet of tankers operating in the Black Sea and beyond. With structures in Moscow being targeted at present, a significant qualitative shift in the strike attacks can be seen in June 2026. The campaign is now being formally used as a deliberate instrument of coercion.
The entire value chain has been taken under the target set. Oil refineries, pumping stations along the Druzhba pipeline, the Caspian Pipeline Consortium terminal at Novorossiysk, Grushovaya oil transhipment hub (one of the largest in southern Russia), as well as the tankers of the shadow fleet that are as deep in as the Mediterranean, have been struck by the Ukrainian strikes. About 21 of Russia’s 38 large refineries were successfully struck by October 2025, which was an increase of 48% as compared to 2024. Vladyslav Vlasiuk, Ukraine’s sanctions commissioner, described the strategy as “kinetic sanctions”, meaning the campaign physically targets financial structures in Russia that sustain their war effort in a way that just financial enforcement cannot. Tools used for the campaign include indigenous long-range drones that can strike targets in ranges over 1,300 kilometres away, and the Sea Baby maritime drones costing approximately $240,000 per unit, striking vessels worth millions.
Why is Russian Oil Important
Russia’s ability to sustain the war is inextricably linked to its oil and energy revenue. An understanding of Russia’s fiscal dependence on energy becomes crucial to grasping the strategic logic of this campaign. In Russia’s federal budget of 2024, energy, i.e., oil and gas, accounted for approximately 30% of the total intake. According to the Finance Ministry of Russia, the total oil and gas revenue received by Russia was assessed at 11.131 trillion rubles ($113 billion) in 2024. At the peak of its wartime production, Russia was earning $467 million per day solely through oil sales. It is important to note that these revenues are not secondary or of minor importance to Russia’s wartime effort. Instead, given Russia’s reliance on energy revenues, they become foundational in nature. With the war continuing, military spending remains an important facet of Russia’s budget. Nearly 40% of Russia’s federal budget for 2026 has been allocated to security and defence of the country. This elucidates the strong linkages between energy revenues and Russia’s wartime battlefield capabilities.
In the initial years of the war, Russia primarily sustained its oil revenues through its ‘Shadow Fleet’, used to bypass sanctions that took years to evolve and implement. Thus, the targeting of physical structures of energy production provided Ukraine with a quicker alternative to target Russia’s oil revenues, while complicating Russian efforts to mitigate the same.
Could the Energy Infrastructure Become a Pressure Point?
It would be prudent, given the evidence, to consider the energy infrastructure to already be serving as a pressure point for Russia. Russia had imposed a petrol export ban in March 2024 when Russian refinery capacities were reduced by about 15% earlier in the year due to Ukrainian strikes on oil facilities in Russia. This ban extended for a while through the summer of 2025. As October of 2025 rolled around, the Russian total refining capacity had seen temporary dismantling by at least approximately 20% due to heavy strikes. Indicating a significant divergence, the crude energy export volumes managed to remain largely stable due to Russia redirecting unprocessed oil to buyers. In that period, export of refined products witnessed a sharp decline. The Ukrainian attacks had managed to disrupt the refined energy chain instead of the crude raw volumes. Substantial monetary consequences were noted. Russia’s budget deficit reached 4.9 trillion Rubles by July 2025. To elaborate, this was 129% of the whole year’s target and 4.5 times more than the similar period in 2024. A drop of 24% was experienced by Russia in the oil and gas revenues of 2025. As of June 2026, the Ukrainian strikes have caused shortages in fuel across regions in Russia with a complete ban on public fuel sales in Crimea and rationing being undertaken at petrol stations.
The limitations to the disruption must also be considered. As the fourth largest economy, Russia stands at approximately $7.14 trillion in purchasing power parity in terms of GDP. This is perhaps large enough to cushion and absorb some of the disruption, preventing a full-scale export disconnection. Terminals that were damaged, such as the one in Ust Luga, resumed functionality at nearly 50% capacity in about 2 weeks after being struck by an attack. In addition, the globally rising oil prices, in some respects affected by the West Asia conflict, have had an effect of partially offsetting the Russian volume lost, through a higher value of per-barrel revenue.
Implication for major buyers and the global market
The consequences and implications of this are far-reaching and extend beyond Russia. India and China, post the closure of European markets in 2022, together accounting for consumption of 3.5 million barrels per day, emerged as the primary buyers of the discounted Russian crude oil in the Russian oil exports of 2024. Large volumes of Russian Ural crude at very steep discounted prices are routed to India through Baltic and Novorossiysk terminals. Continued attacks on facilities in Russia would negatively impact the trade. It would compress refinery margins and tighten the supply margins. With Ukraine’s campaign in the region intensifying, the concern for India is more pressing than it is distant.
Overreaching effects are seen in other places as well. In late 2025, the Caspian Pipeline Consortium terminal at Novorossiysk was heavily attacked by Ukrainian strikes. This caused massive disruptions in the Kazakhstani oil exports since approximately 80% of the total oil exports transit through that very facility. This compelled Kazakhstan to reconsider the diversification of export routes urgently. Moreover, war risk premiums for tankers for port calls in the Black Sea have tripled in value since late 2025. This has raised the cost incurred by every buyer for Russian oil trade in the system.
Stability in global prices cannot be guaranteed due to the dynamic nature of the market as well as the factors affecting it. Approximately 4 million barrels per day are held by OPEC+ in spare capacity. This is to reduce the risk of something like the 2022 spike in prices from reoccurring. However, the buffer is finite. Strikes coinciding with independent disruptions in supply, as observed in the spring of 2026, have an exacerbating effect on oil prices, which becomes increasingly difficult to absorb. Countries such as India, which are energy-importing, must factor this reality into their calculations for supply diversification.
Conclusion
The Ukrainian campaign of June 2026 has shifted the way of approaching the debate on deep strikes. The strategic debate shifts the tactical nuisance aspect of it to being used as a deliberate instrument of economic pressure/coercion. Budget deficits, the 24% drop in energy revenues, the refining capacity being disrupted, as well as the spreading of fuel crisis all indicate an adversary that is under genuine and compounding fiscal stress. Russia’s defence budget continues to climb, and it has not yet been forced to rethink strategically. This formally authorised 40-day campaign hints to a deliberate tactic being used that intends to push economic damage such that it constrains operations. Thus, ultimately this conflict between Russia and Ukraine may elucidate a new way of economic coercion whereby deep, persistent strikes on export infrastructure prove more enforceable and far harder to escape than just years of financial sanctions. This is a result of economic sanctions not having their desired effect and so the kinetic measures become the course of action instead. For the kinetic measures to be reduced, leaner, more effectively implemented sanctions would be beneficial.
