Every drone deployed by Ukraine against Russian oil industry targets aims to deplete the Kremlin’s financial resources for waging war.
Russian oil / © TSN.ua
Despite precise, targeted strikes on Russia’s oil facilities, Ukraine’s strategy may not yield the expected outcomes due to the peculiarities of taxation and high oil prices.
This is reported by The Spectator.
The publication notes that currently, this strategy is unlikely to be achieving its intended results. Russia derives its primary revenue not from exports, but from oil extraction.
The publication explained that Ukraine’s objective is to reduce Moscow’s budget revenues, which fund its war machine. The logic is to disrupt oil exports, decrease revenue, and consequently, limit Russia’s capacity to wage war.
According to Reuters, at least 40% of Russia’s crude oil export capacity – approximately 2 million barrels per day – is currently non-operational. This is a consequence of Ukrainian drone attacks, the shutdown of the “Druzhba” oil pipeline, and countermeasures against the shadow fleet of oil tankers.
The publication pointed out that on the night of March 22nd alone, Ukrainian drones struck Primorsk, Russia’s largest oil terminal on the Baltic Sea, where an oil depot caught fire. Two days later, the terminal in Ust-Luga, which processes around 700,000 barrels of oil per day, was attacked.
However, Ukraine’s strategy has a significant flaw, which becomes apparent under the current conditions of the global oil market.
Journalists recalled that in January 2024, the Russian Federation completed a tax reform in the oil sector, abolishing export duties. Now, the main income is generated from the mineral extraction tax, which is dependent on extraction volumes and oil prices, rather than exports.
Specifically, in 2025, the Russian federal budget received approximately $108 billion in oil revenues. At that time, the average price of Urals crude oil was $62–65 per barrel.
Currently, the price of Urals exceeds $100 per barrel. Amidst the conflict in Iran and restrictions in the Strait of Hormuz area, Russia’s routes via the Baltic Sea and the “Eastern Siberia–Pacific Ocean” pipeline to China remain stable.
The publication emphasized that buyers in need of supplies are effectively negating the traditional discounts on Russian oil. The average price in March is expected to be $85–90 per barrel – nearly 50% more than in February.
According to journalists’ calculations, every $10 increase in the price of Urals adds approximately $1.5 billion in monthly revenue for Russia from the extraction tax. Thus, in March alone, the Russian budget may receive an additional $4.5 billion, even with reduced exports.
If high prices persist for several months, the additional revenue could reach 0.8% of Russia’s GDP.
The publication also noted that the Russian Federation has already suspended changes to fiscal rules regarding the use of the reserve fund and may reconsider expenditure cuts.
In conclusion, journalists deduced that Ukraine is effectively exacerbating the global oil deficit. If the disruptions are short-lived, their impact will be smoothed out by average monthly prices.
In the authors’ opinion, the strategy of striking oil infrastructure would be effective at a price of around $65 per barrel, but at a cost exceeding $100, the economic effect works in the opposite direction.
Earlier, it was reported that the Security Service of Ukraine had reached an unprecedented level of long-range strikes against the Russian Federation.
We previously informed that due to successful Ukrainian drone attacks, an incident at a key pipeline, and the detention of tankers, at least 40% of Russia’s oil export capacity has been halted.
Source: tsn.ua