Ukraine’s drone attacks have left Russia desperately scrambling for oil imports

A sanctioned shadow fleet tanker carries oil from Nato member Turkey to a Russian Baltic port. A deal is signed for Russian oil to be processed in Kazakhstan. Fuel cargoes arrive from India via Egypt. The Kremlin pressures allies to sell it badly needed fuel.The data points may be diverse, but they point to a single inescapable conclusion.In the space of a summer, Russia, once the world’s second-largest producer of crude oil, has been plunged into a desperate scramble to find sources of gasoline to plug the ever-growing holes in its refining capacity.The Kremlin has tapped into a widening number of sources in recent weeks to alleviate an energy crisis that has led to rationing at filling stations, as long-range drone attacks from Ukraine target the oil processing plants that usually supply them.For the first time, Russia this week bought a shipment of 200,000 barrels of gasoline from Turkey, which are being shipped from Mersin to the Baltic port of Primorsk via a sanctioned tanker, the Wendrix. It is the fifth confirmed seaborne delivery of vehicle fuel this summer, after previous shipments via Egypt from a refinery at Vadinar in India, amounting to 1m barrels in total.Russia has also signed a deal with the Kondensat oil refinery in western Kazakhstan this week to process Russian crude outside the country, which would see 70% of the refined fuel shipped back to Russia. Oil will need to be delivered to the refinery by rail as the facility is not connected to a Russian pipeline, according to reports.This summer has also seen big increases in the amount of fuel Russia imports from its Ukraine war ally Belarus. Imports this June increased by a staggering factor of 141 compared with June last year.Kremlin officials had expressed hope earlier in the summer that Russia might be turning a corner in its fuel crisis, but instead August has seen a new intensification. At least six Russian regions have reinstated or tightened restrictions on gasoline sales and a new wave of Ukrainian strikes on oil processing facilities completely shut down the Orsk refinery.Russia’s deputy prime minister, Alexander Novak, who in ​July had said Russia would begin importing oil products to help stabilise the domestic market, this week described the country’s energy situation as “constantly changing” as he said some refineries were back in operation.“The situation is changing every day. We’re constantly monitoring it and are making decisions at our headquarters. We’re gathering the federal headquarters with the regions and all of our companies twice a week,” he said.The aim of Kyiv’s campaign is to bring the cost of the war in Ukraine back to Moscow.In the midst of an international sanctions regime that has already damaged Russia’s economy, the Ukrainian strikes on refineries – which have intensified in the last two months – are not only hitting a source of revenue that has been used to pay for Vladimir Putin’s war, but have prompted serious domestic shortages that even the latest efforts appear unable to mitigate.Ukraine has so far in August carried out 18 attacks on Russian refineries, matching the previous month’s record. Even before Ukraine stepped up its campaign against refineries, output had dropped by 28%, according to industry analysts.Writing in June, retired Australian general Mick Ryan predicted Ukraine would only increase its efforts to hit Russian oil production.“Putin has never retreated, in public, from his maximalist ambition to subjugate Ukraine. The strikes are not designed to change his rhetoric; they are designed to change his calculus,” he wrote.“Strategy, in the end, is a contest of competing calculations, and Ukraine’s bet is that sustained pressure on Russia’s economic foundations will, over time, force a recalculation that battlefield performance could not. This will not happen quickly, and it may not happen at all. But it denies Putin his longstanding assumption that time is on his side.”That was echoed last month in a commentary for the Royal United Services Institute by Petras Katinas and Natia Seskuria.“Russia’s fuel shortages are becoming a budget problem. Ukraine’s sustained strikes on Russian refineries are not only damaging infrastructure and squeezing Russia’s oil industry, they are forcing the Kremlin to spend more to keep fuel flowing at home while earning less from exports. That trade-off is becoming increasingly expensive.”And the biggest damage being inflicted is also likely the hardest to detect, they added.“Export restrictions prevent refiners from selling into higher-priced foreign markets, reducing foreign currency earnings while limiting companies’ ability to recover costs at home.”