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Russian oil economy suffers the hardest single hit in decades

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Today, there are important updates from the Russian Federation.

Here, Ukraine has unleashed its drones on Russia’s oil infrastructure, dealing it one of the most devastating blows. The situation has become so dire that the Russian analysts are raising the alarm as the whole country prepares for the worst economic hit in over half a decade.

Recently, Russian economists warned that the current economic situation is officially the worst since the covid pandemic. Notably, Russia was forced to cut oil output by up to four hundred thousand barrels per day immediately following repeated Ukrainian drone strikes on refineries and ports this month. This reduction marks the sharpest monthly decline in production since the covid period, despite Russia trying to hide oil production data shortly after the war in Ukraine began, citing national security.

To deprive Russia of any chance of improving this situation, Ukrainian forces targeted four major oil-related facilities in Russia, with the Novokuybyshevsk oil refinery in Samara Region being the first. This is a key processing site, where the strike triggered a large and intensifying fire. The damage forced Rosneft to halt operations at the facility, including critical processing units and port infrastructure. Shortly afterward, Ukrainian drones struck the Syzran refinery in a follow-up attack. The strike ignited fires in the storage tank area, an essential hub for handling crude oil from Western Siberia. This facility supports domestic supply, river transport via the Volga, and pipeline exports to Novorossiysk. Further north, a long-range Ukrainian drone strike targeted the Vysotsk port terminal in the Leningrad region, causing a fire at the petroleum facility. The terminal handles approximately one hundred and eighty thousand barrels of oil per day, making it a significant chokepoint in Russia’s export network. In the Krasnodar region, a fire broke out at the Tikhoretsk oil pumping station, first detected by NASA fire monitoring systems. This station is a critical inland node in Russia’s pipeline system, serving as a dispatch point that integrates pumping infrastructure, storage facilities, and a transshipment terminal. These strikes are following a clear pattern of Ukraine systematically dismantling Russia’s oil infrastructure at every stage of production.

To complement these strikes, Ukrainian forces also targeted the Volgograd-Tikhoretsk oil product pipeline, one of the primary arteries supplying diesel fuel to southern Russia, and running from the Volgograd refinery to Tikhoretsk, and onward to the export terminal in the sea. Due to the attack, a large-scale fire is ongoing at the Tinguta Gas Pumping Station, where a Ukrainian drone strike hit four fuel tanks.

Further south, another strike targeted a linear production and dispatch station in Krymskaya station, part of Russia’s Transneft oil pipeline system. The attack triggered a fire at an electrical substation within the facility, which plays an important role in regional oil transport logistics. Satellite imagery indicates substantial damage, with storage tanks burning.

Ukrainian long-range drones also struck an oil depot in Sevastopol, causing fires to break out in the port area that proved difficult for Russian forces to extinguish. The blaze continued into a second day at the Yugtorsan oil depot, indicating sustained damage to fuel storage infrastructure, and satellite imagery confirms the destruction of at least two fuel storage tanks.

To maximize the scope of its campaign, Ukraine has also extended strikes beyond core refining and transport infrastructure by striking two offshore drilling platforms in the Caspian Sea, which are part of active oil fields in the region.

These strikes disrupted Russia’s whole oil production and export chain, degrading its ability to drill oil, refine it, and transport it to export hubs. Ukrainian attacks on Russia’s Black Sea and Baltic ports resulted in Russia losing forty percent of its oil exports, marking the biggest oil export decline since Covid, indicating the importance of these operations in reducing Russian oil revenue. This prevents Russia from exploiting the skyrocketing of oil prices in connection with the war in Iran. If not prevented by Ukraine, this could have reduced Russia’s widening budget deficit, which reached fifty-nine billion dollars in the first quarter, eclipsing the forty-eight billion gap, which was projected for this year.

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