World
Ukraine's Drone War on Russia's Oil Is Starting To Bite
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Oil exports from Russia's western ports fell 15% below plan this month as strikes on refineries and terminals pile up
Russian oil exports from the country's western ports dropped 15% below plan in early August, traders told Reuters, after Ukrainian drone strikes hit the port of Novorossiysk and other energy sites.
It is the clearest sign yet that Kyiv's long-range campaign is cutting into the money that pays for Moscow's war.
The oil money still flows east
Russia's energy trade did not collapse when Europe stopped buying but moved east. China and India now take a combined 85% to 87% of Russian crude exports, according to analysis by the Centre for Research on Energy and Clean Air, a Finland-based research group.
Those cargoes travel on a so-called shadow fleet of hundreds of ageing tankers. The ships operate outside Western insurance and shipping rules, letting Russia sell above the G7 price cap.
Russia's oil and gas revenue in July was expected to rise about 60% year on year, Reuters reported, helped by higher prices. But Revenue for the first seven months of 2026 fell 16.8% year on year to around 4.6 trillion roubles (c.£39 billion).
Oil and gas once supplied around 42% of Russia's federal budget. That share has fallen to roughly 20% to 25%.
The discounts hurt too. Russia's Urals crude has traded between $10 (£7) and $28 (£21) a barrel below Brent since the invasion, according to analysis published by VoxUkraine.
More than 300 strikes, and counting
Ukraine has hit Russian refineries, fuel depots, pipelines, and export terminals more than 300 times since 2022. The campaign accelerated sharply, with over 120 attacks in 2025 alone, the Financial Times reported.
At its peak, the damage cut Russia's refining capacity by an estimated 17%. That triggered fuel shortages inside Russia itself, with petrol rationing reported in some regions. Drones have reached targets as far away as Omsk in Siberia, roughly 2,500km from Ukraine.
With less refining capacity, Russia is forced to export more raw crude at a discount rather than higher-value fuels.
What it means for the Kremlin's war chest
Oil and gas once supplied around 42% of Russia's federal budget. That share has fallen to roughly 20% to 25%. In January, Reuters calculated the monthly take was set to sink 46% year on year.
The 2026 budget assumes oil and gas revenue of about 8.92 trillion roubles (c.£76 billion).
Sanctions add a slower squeeze. Cut off from Western technology and finance, Russia struggles to develop new fields, including Arctic projects, and depends increasingly on China and India as customers it cannot afford to lose.
Western governments say tightening enforcement against the shadow fleet remains a priority, and Ukraine has shown no sign of easing its strikes on Russian energy targets.
