Ukraine’s Strategic Drone Offensive Against Russian Energy: Part One
“The Fighters are our salvation, but the Bombers alone provide the means of victory. We must therefore develop the power to carry an ever-increasing volume of explosives to Germany, to pulverize the entire industry and scientific structure on which the war effort and economic life of the enemy depend, while holding him at arm’s length from our island.”
Winston Churchill, September 3, 1940
“In these weeks, many have already seen that the Russian system of war has vulnerabilities and that we can exploit these vulnerabilities with our weapons.”
Volodymr Zelensky, March 17, 2024
“The strategic operation against the Russian oil industry is a triumph of tactics, weapons, and management.”
Yuri Butusov, Ukrainian military analyst and blogger and a frequent critic of Ukrainian President Zelesnsky
Taking the War to Russia Oil
On January 24, 2024, Ukraine took its defensive war against Russia to a new stage by launching a series of ongoing sustained drone strikes against targets deep inside Russia circumventing Russian air defenses to attack as many as 15 key Russian energy infrastructure facilities.
Displaying never before-seen drone capabilities in its three-year-old war, Ukraine is now wielding a new asymmetric weapon to strike key Russian economic targets as far as 1,400 kilometers from the borders of Ukraine. In one recent case, Kyiv attacked one of Russia’s largest oil refineries in the Russian Muslim republic of Bashkiria deep in the foothills of the Volga-Ural Mountains, demonstrating Ukraine’s new-found capabilities to mount attacks on Russian economic targets virtually anywhere in European Russia.
The success of the Ukrainian drone strategy over the past five months is attributed to several factors. First, Kyiv has produced a new array of unmanned long-range drones to target Russian oil refineries, ports, and storage facilities, reducing Russia’s ability to export refined oil. Second, Ukraine has made a major technological advancement in the war to sidestep Russian electronic jamming of its long-range drones by equipping its drone fleet with Artificial Intelligence (AI) to enable the drones to resist electronic interference. Third, Ukraine has identified vulnerable nodes of Russian oil refineries known as replicator columns which if destroyed can completely disable a Russian refinery leaving it unable to refine oil. With this new level of precision strike capabilities using unmanned subsonic drones Ukraine’s strategic drone campaign has begun to take a toll on Putin’s war machine reducing Russian oil production by as much as 14 percent in the first quarter of 2024, causing at least two of Russia largest oil refineries to suspend oil production since the start of the strategic bombing campaign earlier in the year.
List of Russian Refineries Hit by Ukrainian Drone Strikes as of May 17, 2024
Hitting Putin’s Hometown: The Ust-Luga Gas Terminal Attack in St. Petersburg
On January 21st, Ukraine flexed its newfound drone muscle by launching an attack on the energy infrastructure in the Baltic port of Ust-Luga with a drone attack on the Russian LNG facility. Ust-Luga is one of two main Baltic Sea energy export outlets used by Russia located approximately 130 kilometers (81 miles) southwest of St. Petersburg. It is no accident President Zelensky ordered the first long-range drone attacks to begin by attacking the Russian oil and gas terminal at Ust-Luga located outside President Vladimir Putin’s hometown of St. Petersburg. The Ukrainian attack struck the Novatek LNG terminal at Russia's Ust-Luga Port, which has a direct economic impact on the Russian economy as well as an indirect political and psychological effect on Russia due to its proximity to St. Petersburg.
The Ust-Luga attack created high-level concern among Russian port officials and was so severe that the Port of St. Petersburg decided to halt the handling of ammonium nitrate, a common fertilizer that also doubles as an explosive. According to the Rusian newspaper Kommersant, after the January Ukrainian drone strikes on Ust-Luga, St. Petersburg's governor feared that a similar attack on the ammonium nitrate transfer terminal also might occur and cause a similar type of disaster. The St. Petersburg terminal processes about three million tonnes per year, and - if ignited - a commercial quantity of the substance could potentially generate a devastating blast to the area.
A Ukrainian drone strike on the ammonium nitrate storage facility posed a major threat to the city of St. Petersburg since ammonium nitrate played a major role in causing the 2020 Beirut port explosion in Lebanon which destroyed half the port. Apparently, the Ust Luga attack was so severe that the Russian port was shut down for two months which was a major blow to Russian exports. Moreover, the Ust-Luga attack also carried a secondary strategic impact affecting the Russian Baltic enclave of Kaliningrad which is almost completely dependent on maritime transport from the St. Petersburg port to keep its economy afloat.
Strategic Impact on Russian Oil Refining
Since the first wave of drone attacks began in January Ukraine has launched as many as 15 different refinery attacks on Russia, also attacking numerous oil depots and storage facilities. Reported attacks have targeted the following refineries:
Ust-Luga (St. Petersburg), January 21
Tuapse Refinery, January 24
Volgograd Refinery, February 3
Afipsky Refinery, February 9
Ilinsky Refinery, February 9
Lukoil-Nizhegorodnefteorgsintez Refinery, March 12
Ryazan Refinery, March 13
Kaluga Refinery, March 15
Syzran Refinery, March 16
Kuybyshev Refinery, March 16
Slavyansk Refinery, March 17
Novokuibyshev Refinery, March 23
Taneco Refinery, April 2
Ilsky Refinery, April 27
Slavyansk Refinery, April 27
Ryazan Refinery, May 2
Gazprom Neftekhim Salavat Refinery (Bashkiria), May 9
Kaluga Refinery, May 10
Tuapse, May 17
Within a month of Ukraine’s bombing campaign, Russian refining capabilities and oil exports began to be affected by the drone strikes. On February 27, Moscow announced it was suspending oil exports for six months to ensure that domestic demand is met while repairs are made to damaged refineries. While estimates vary on the impact of the attacks, one source told Euronews that Ukraine has put 16% of Russia's motor fuel production out of commission.
Ukrainian drone strikes have hit Russian oil refineries with varying degrees of success. The Volgograd plant, for example, has been severely damaged, and it might take approximately until the start of summer to repair according to Kommersant. The refinery at Ryazan, the third largest in Russia, remains offline while the refinery at Tuapse, the largest in southern Russia just came back into operation on May 6 after being attacked on January 24. It was hit again on May 17 which will likely take it back offline again for another several months.
Russian officials have tried to downplay the impact of the drone attacks and minimize the damage of public embarrassment at not being able to fend off Ukrainian drone attacks on its strategic energy infrastructure. Kommersant, for example, reported that the refineries were not as seriously damaged by the drone attacks, such as the Ilsky oil refinery, which it claimed was repaired in less than a month.
As the world's third-largest oil producer, with the United States and Saudi Arabia ranking first and second, Russia heavily relies upon its refining capacity to maintain its position in global energy. If that capacity is somehow damaged, then Moscow has to export unrefined oil overseas for costly processing. Russian oil refineries play a critical role in the country's economy helping the Kremlin to maintain a global energy presence. Its refineries process crude oil into various petroleum products, including gasoline, diesel, and jet fuel, catering to both domestic consumption and international export markets.
Russia produces more than 530 million tons of oil per year, of which about 280, million tons are processed by refining facilities inside the country. By targeting Russian refining facilities Kyiv has created the need for Moscow to import more expensive fuel and export even more oil at cheaper prices. Ukrainian attacks have already idled over 7% of Russia’s refining capacity in the first quarter of 2024. In response to refinery outages, Russia is set to increase its oil exports through Western ports by almost 200,000 barrels per day. The Director of the International Program at Kyiv School of Economics Elina Ribakova told Euronews that "These strikes will create a lot of damage and putting refineries back on track will be incredibly challenging. They rely on sophisticated technology and a lot of large imported components."
Indirect losses, including a drop in the refining capacity of the Russian oil industry, are estimated at more than 70 million tons per year, which is more than 25% of all Russian capacity. The indirect consequences of the Ukrainian drone strikes inside Russia have led to:
— a 50% increase in gasoline prices in Russia;
— a ban on gasoline exports from Russia (a $2 billion loss for the state budget $4 billion in lost revenue from oil companies);
— reduction of production by 500,000 barrels per day (annual losses can reach $12 billion);
— significant reduction in fuel supply to the Russian military.
Carnegie expert Sergey Vakulenko pointed out the severity of these attacks and specifically noted that:
“If the scale of Ukrainian drone attacks is maintained at the levels of March and Russian air defenses do not improve, Ukraine will be able to keep damaging Russian refineries faster than they can be fixed, slowly but steadily eroding the country’s refining capacity.”
By late March Vakulenko’s prediction had proven accurate. On March 27, Russian setbacks in its oil refining capacity forced Moscow to increase gasoline imports from neighboring Belarus to avoid the risk of shortages in its domestic market because of ‘unscheduled repairs’ at Russian refineries after drone attacks, industry, and trade sources told Reuters. Officials in Moscow later approached Kazakhstan to create an oil reserve in case it ran out of refined oil.
On April 4, an official at NATO said Ukrainian strikes on Russian refineries may have disrupted more than 15% of Russian capacity. By May 2024, it was becoming apparent that US intelligence was giving attention to the Ukrainian drone strikes on Russian energy facilities. Estimates by the Defense Intelligence Agency (DIA) were not far off from what NATO officials had publicly indicated. According to evidence presented in the latest Inspector General’s report on Ukraine released by the Pentagon, Ukraine had caused Russia to lose 14 percent of its oil production in the first quarter of 2024 according to the DIA estimate. Furthermore, the Pentagon Inspector General also produced a detailed energy chart (see below) which identified Russian refineries struck by the attack, noting that the third largest refinery in Russia located at Ryazan had been hit twice by Ukrainian drones which explains the length of time the highly important refinery has been offline and unable to refine oil.
Ukrainian Drone Strategy
Beginning with the attacks on the Ust-Luga oil and gas terminal in St. Petersburg in January, Ukraine has developed a comprehensive strategy that started initially with attacks on selective energy targets. As Kyiv gained confidence in its newfound capabilities it gradually expanded its drone attacks over time to include a broad and growing number of Russian refineries. As one Ukraine commentator said concerning the bombing campaign against Russia:
“We realised Russia had two sacred areas: Crimea and its oil industry. Oil is to them what grain is to us. They can starve and freeze, but oil must be dug and pumped; this gives them a cause to live in the world.”
Although Russia has between 70 to 80 oil refineries, Ukrainian sources estimate this number is no larger than 30-32 large-scale refineries. Many of Russia’s refineries are offline and undergoing repair and are not big enough to factor in Russian oil production. One Ukrainian expert noted that since the beginning of the year, at least 15 of the 30 largest Russian refineries have been damaged. Several of the largest refineries have experienced multiple drone strikes, such as Ryazan and Tuapse. The Ryazan oil refinery is run by the state oil giant Rosneft and refines approximately 5.8% of Russia’s total refined crude according to Reuters (cited by Moscow Times, May 1).
According to Mykhaylo Gonchar, Ukraine’s energy expert, and President of the Centre for Global Studies “Strategy XXI,” Ukraine has intentionally avoided attacking export pipelines and seeks to diminish Russian ability to refine oil. This in turn will force Moscow to export overseas to be refined which would be even more costly for the Kremlin. Moreover, a particularly noteworthy aspect of the Ukrainian drone strategy is that it appears to be designed to lessen White House concerns about Ukrainian attacks driving up the global price of oil which would create a potential election backlash inside the United States against President Biden for the upcoming US presidential election. US National Security Adviser Jake Sullivan urged Kyiv according to a March 22 article in the Financial Times to ask Ukraine to halt its strategic bombing campaign because of this fear.
Another interesting aspect of the Ukrainian drone strategy is the timing of the attacks which appeared to coincide with the beginning of the spring planting season in Russia when the demand for diesel soars in Russian agriculture. In 2023, Russia experienced a fuel deficit during the August harvest, forcing the government to curb fuel exports.
Ukrainian attacks on Russian refining capacity have created a particular dilemma for the Kremlin because there appears to be little spare refining capacity elsewhere in the world for Russia to send its oil for refining, especially if its refining production capabilities remain offline for any prolonged period. As Aslak Berg, a Research Fellow at the Centre for European Reform told Euronews:
"The Ukrainians have been hitting refineries, not Russian crude oil production or export facilities. This causes problems for Russia's domestic market for refined products, but for the rest of the world, a decline in Russia's exports of products will be compensated for by increased exports of crude oil." Berg went on to add that since Russian import capacity for refined oil products is limited in the short run, they're set up to export, it's actually a fairly clever way of causing disruption in the Russian market with limited impact globally."
Aside from the economic impact caused by the drone strikes Ukraine also made significant headway in shattering the aura of Kremlin invincibility. By attacking 15 out of 30 major Russian oil refineries Ukraine has demonstrated it can attack the heart of what Russia considers its greatness - its oil industry. The aura of impregnability Putin portrays to the outside world is comparable to that of Hitler. Churchill, however, shattered that myth in 1940 by taking the war to the Nazi leadership when the British Prime Minister ordered the Royal Air Force to mount its first-ever long-range bombing attack on the German capital of Berlin on August 25th, 1940. Eight decades later Ukrainian President Zelensky made a similar move on the eve of the Russian Presidential election addressing the Ukrainian nation by referring to the perceived notion of Russian invincibility when he described the importance of the Ukrainian drone offensive stating:
“These weeks have demonstrated to many that the Russian war machine has vulnerabilities that we can reach with our weapons. I am grateful to the Armed Forces of Ukraine, the Security Service of Ukraine, and Defense Intelligence for their new Ukrainian long-range capability. I am equally grateful to our defense-industrial complex and everyone who works for Ukrainian strength. What our own drones are capable of is a true Ukrainian long-range capability. Ukraine will now always have a strike force in the sky.“
Conclusion
Since attacking the Ust-Luga oil and gas terminal near St. Petersburg in late January Ukraine has reached a major milestone in shattering the myth of Putin’s invincibility through its repeated drone strikes on Russian energy infrastructure. Virtually no part of European Russia has escaped the Ukrainian drone attacks as more than 50 percent of Russian oil refineries have been hit at least once. Moreover, based upon data from at least 15 of these refinery attacks Ukraine has been relatively successful in reducing Russian refinery output by as much as 14 percent in the first quarter of 2024.
Until the recent Novorossysk port attack on May 17, Ukraine has avoided launching direct attacks on Russian oil export terminals, preferring to focus on eliminating Russian refining capacity instead of port infrastructure. Initially, this appeared to be part of the Ukrainian drone bombing strategy when it attacked the Ust-Luga gas terminal on January 21st. Ukraine’s restraint in specifically targeting Russian oil and gas port terminals appears to be traced to repeated public and private warnings by US officials to avoid attacking Russian energy infrastructure out of a fear it could lead to a spike in global oil prices,
On March 22, Financials Times wrote that US National Security Adviser Jake Sullivan reportedly urged Ukrainian officials to stop attacking Russian energy facilities. The timing of Sullivan’s request came a week after Zelensky announced the bombing campaign when Ukrainian unleashed its drone bombing campaign of Russian oil facilities, which coincided with the Russian presidential election. Perhaps unintended US efforts to pressure Ukraine in many ways were a pre-election gift to Vladimir Putin. Interestingly enough, according to the same article, US officials also warned Ukraine about attacking Russian export facilities operated by the Caspian Pipeline Consortium (CPC) which exports Kazakhstani oil from Novorossiysk, the site of the most recent May 17 attacks.
Despite the success of the Ukrainian bombing campaign US officials continue to publicly warn Ukraine to avoid attacking Russian energy facilities, including as recently as April 9 when Secretary of Defense Lloyd Austin repeated the US request. Public condemnation of the Ukrainian attacks by the Biden Administration could explain why Ukraine shifted away from attacking Russian oil and gas export terminals to focus on striking Russian refineries from late January to mid-May.
On May 17, however, Ukrainian restraint ended when the Russian Black Sea port of Novorossysk, and crucial CPC oil terminal for Kazakh (Chevron) oil, was attacked by as many as 60 Ukrainian drones heralding a new stage in the bombing campaign. US concerns about the impact on global oil prices do not appear legitimate. No signs exist that the drone attacks have undermined global oil markets. In fact, the price per barrel for OPEC crude, for example, continues to remain at around $85.00 per barrel which was approximately the same price when the attacks intensified in March 2024 at the time of Sullivan’s request.
In the final analysis. the core goal of the Ukrainian drone strategy is primarily military-related and designed to degrade Putin’s ability to wage war against Ukraine. So far the results of its bombing campaign remain premature to assess as to whether it has had an impact in curtailing the Russian war effort. However, one should keep in mind that the importance of the drone attacks is likely to create the “Scamper effect” whereby Moscow is racing around seeking to find replacement fuel for the lost oil due to the attacks. This in turn affects Russian military planning as Moscow rushes to bring the strategic refineries back online and configure how these fuel losses will affect present and future military operations. The strategic effect of the attacks on Russian agriculture is another of the ‘known unknowns’. If one of the secondary goals was to curtail Russian agricultural output by reducing the amount of refiner oil available domestically then those results won’t be known until later in the fall.
Given the range of refineries and oil depots attacked by Ukraine during the drone offensive, Kyiv has managed to attack virtually every major Russian energy-producing and storage facility within 1,000 kilometers of Russian frontline military operations, striking storage depots in Belgorod, Klintsy, Smolensk, Tuapse (hit twice), and Rostov (the headquarters of Russian military operations against Ukraine). These attacks have surely disrupted the tempo of Russian military operations and their planning process against Ukraine by creating domestic oil shortages in the southern theater of military operations. The fact is that US defense intelligence is closely tracking the Ukrainian refinery attacks is significant given that Ukraine has done so with a limited array of first-generation long-range drones. Far more significant though in my mind is what the second quarter results of these attacks will be in 2024 and whether these attacks are likely to show more damaging consequences for the Russian economy and ongoing Russian military operations.
Regardless the fascinating topic of Ukraine’s strategic drone bombing campaign is a fascinating one and has echoes of the US “Mighty 8th Air Force” repeated attacks on the Romanian oil fields at Ploesti during the Second World War. The long sequences of Ukrainian attacks and shortages of Russian air defenses to protect its oil refineries is something I will plan to write more about in Part Two of this series which will explore how Ukraine is specifically able to cripple Russian refineries and what are the new array of drones it developed to avoid Russian electronic jamming and how the Russian Ministry of Defense is unable to provide the means to defend these refineries and why Rosgvardia (the Russian National Guard) has been given this key task which it is ill-equipped to perform.
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