Drone Strikes Drive Russia’s Oil Refining to a 17-Year Low.

Russia’s Oil Refining Sector in Turmoil

According to UATV: In May, Russia’s crude oil processing volume fell to its lowest point in 17 years. According to available data, refineries processed only 4.58 million barrels per day—a 2.3% drop from April and a 14.4% decline since the start of the year. On an annual basis, refinery utilization has decreased by 13%, and compared to pre-war 2021 levels, the figure is down by 20%. This sharp contraction is largely attributed to sustained Ukrainian drone attacks on key Russian refinery infrastructure.

Gasoline Prices and Market Distortions

The supply of Ai-95 gasoline in May also shrank to just 5,000 tons per day, one-third less than during the same period last year. Since January, gasoline prices have surged by 26%, with retail costs climbing faster than inflation. Meanwhile, the volume of gasoline offered by oil companies on the exchange has fallen by 20–25% year-on-year, signaling major market disruptions.

Russia has attempted to offset the fuel shortage by purchasing supplies from Belarus, but these imports have been too small to make a meaningful difference. As analyst Alexander Savchenko noted:

“Data on the losses Russia has suffered due to Ukraine’s long-range sanctions remain classified.”

Overall, Russia’s oil refining capacity has contracted by 20%, underscoring the severity of the challenges the country now faces in this sector. The combination of international sanctions and domestic economic strain is reshaping the industry, with consumers likely to bear the brunt of rising fuel prices and potential shortages. Russia’s growing reliance on imported fuel—such as the limited shipments from Belarus—highlights the vulnerability of its economy amid ongoing global pressures.