IEA: Ukrainian Drone Barrage is Shattering Russian Refining Resilience

Increasingly frequent and precise Ukrainian drone attacks are damaging Russian processing units, extending repair schedules and eroding the resilience of the country’s refining system, according to the International Energy Agency. Moscow has responded with export bans, relaxed fuel quality standards and imports intended to protect domestic supplies.

Russia operates 32 major refineries with combined nameplate capacity of 6.5 million b/d, making it the world’s third largest refined products producer after the US and China. Crude runs nevertheless dropped to 3.8 million b/d in June 2026, down 30% from a year earlier and the lowest level since May 2004.

Gasoline production is reportedly down about 20%. The decline has intensified pressure on a domestic gasoline balance that was already structurally tight.

Ukraine has targeted Russian oil infrastructure since the full scale invasion in 2022, but the IEA said the campaign’s scale, range and effectiveness increased sharply during 2025 and 2026. During the first eight months of 2026, a Russian refinery was successfully struck once every three days on average.

Ukrainian forces are now launching multiple waves of drones against individual sites. According to the agency, that approach can overwhelm protective netting and air defenses surrounding refining assets.

The campaign’s geographic reach has expanded dramatically. Ukraine struck Gazprom Neft PJSC’s 450,000 b/d Omsk refinery on July 7, hitting Russia’s largest refinery about 2,500 km from the border.

Several refineries located closer to Ukraine have been attacked as many as 15 times. By late August, only four major refineries remained untouched, all located in Eastern Siberia or farther east, between 3,500 and 6,500 km from Ukraine.

The strikes also appear to be growing more precise, with secondary processing units increasingly targeted alongside crude distillation units. Fluid catalytic crackers, reformers and hydrotreaters are essential for maximizing light product yields and meeting fuel specifications.

Minor damage to a crude distillation unit can often be repaired within one to two weeks, the IEA said. Serious damage to more complex processing equipment can require six to eight months of work.

The 250,000 b/d Moscow refinery, which was heavily damaged in June, is reportedly expected to remain offline until early 2027. Sanctions are adding to the strain by restricting access to replacement equipment and specialist suppliers needed for repairs.

Russian refiners have attempted to maintain throughput by postponing maintenance, restarting mothballed equipment and completing rapid repairs. Repeated cycles of attacks and repairs threaten to weaken reliability, especially at facilities near Ukraine that have already been struck several times.

Russia banned gasoline exports in April, a step it has used before because of its tight gasoline balance. As the attacks intensified, the government imposed its first jet fuel export ban on June 1 and its first diesel export ban on July 8.

The diesel restriction represented a major change for a country that had exported about half of its diesel and gasoil production. The ban was later extended first through Aug. 31 and then through Sept. 30.

Fuel shortages still spread during the summer demand season, reaching 92% of Russian regions by late June. Conditions stabilized in late July, but renewed drone attacks tightened supplies again during the second half of August.

The Energy Ministry temporarily relaxed fuel quality requirements, permitting Euro 2, Euro 3 and Euro 4 gasoline to be produced, imported and sold through July 1, 2027. It also loosened blending rules so naphtha combined with octane enhancers could count as gasoline.

Those measures stabilized supplies but indicated severe damage to upgrading units, while potentially increasing the risk of engine and emissions system problems. It was Russia’s first such relaxation of fuel quality rules since 2016.

Imports have provided another buffer, with rail cargoes arriving from Belarus and Kazakhstan, although neither country has enough spare capacity to eliminate the deficit. Seaborne shipments from Morocco, South Korea, India and Türkiye also arrived during July and August.

September gasoline imports could reach 500,000 tonnes, equal to about one sixth of monthly demand. Meanwhile, Russian refiners received the equivalent of $14 billion in subsidies from April through July, including damper payments that compensate domestic fuel sales when export prices are higher.

Despite higher crude prices linked to the war between the US and Iran, the federal deficit reached the equivalent of $76 billion during the first seven months. That total had already surpassed the full year 2025 shortfall.

The IEA lowered its baseline forecast for Russian refinery throughput to an average of about 4 million b/d for the balance of 2026 and throughout 2027. It cited cumulative damage, extended repairs, sanctions constraints and growing reliability risks, while warning that longer parts lead times and colder weather could make even that forecast optimistic.