Highly focused attacks are damaging the Kremlin’s key money-making facilities. They could eventually bleed Russia of war-fighting funds.
Sergiy Makogon
Sept 8, 2025
CEPA
Ukraine has launched a bold and unprecedented aerial counteroffensive against Russia that targets its critical energy infrastructure. Unlike Russian aerial barrages, this is not designed to strike civilian and dual-use energy production facilities; instead, it aims to throttle the Kremlin’s key income stream by blowing up refineries and pumping stations.
The approach is different from the Ukrainian campaign of 2024 to the early months of this year, which were smaller-scale and often targeted oil storage tanks. This time, new long-range drones like the FP-1 aim for hard-to-replace refinery equipment, like cracking units, much of it Western-made and affected by sanctions, as well as military-related facilities producing and transporting diesel.
The attacks have produced some spectacular images and some serious results — not least, in long queues at filling stations. The effects are already serious but could become critical if Kyiv is able to maintain its strike rhythm.
The campaign is using domestically produced long-range drones in enormous numbers. Ukraine has struck deep inside Russian territory, targeting 10 major refineries as well as oil infrastructure hundreds of kilometers from the front line. Many of these targets have been struck more than once. The attacks have exposed vulnerabilities in Russia’s critical energy sector, showcased Ukraine’s rapidly advancing strike capabilities, and rattled the Russian economy.
As the war evolves, Ukraine’s ability to disrupt Russia’s oil exports could alter the financial dynamics sustaining the Kremlin’s war machine.
Ukraine’s campaign has been both audacious and precise. Among the targets were some of Russia’s largest refineries and a Novatek gas processing plant on the Baltic coast, nearly 1,000km (600-plus miles) from Ukraine’s border. These facilities are critical to Russia’s economy, which relies heavily on oil and gas revenues to fund its war. By some estimates, Ukrainian drone strikes have disabled around 17% of Russia’s refining capacity, a significant blow to its domestic fuel supply.
The timing could not have been more disruptive. With demand peaking during the summer travel season and harvest period, Russia has faced fuel shortages, long queues at gas stations, and soaring gasoline and diesel prices. Gasoline prices have risen more than 50% this year. In response, Moscow imposed a temporary export ban and considered state price controls — emergency measures that underscore the fragility of its energy-dependent economy.
The success of these operations demonstrates not only gaps in Russia’s air defenses but also Ukraine’s growing capacity to develop and deploy long-range systems. Kyiv recently announced production of its own medium-range missile, the Flamingo, capable of carrying a one-ton warhead up to 3,000km, which would put nearly all of Russia’s energy infrastructure at risk.
If the campaign continues and brings more success, the consequences will force the Kremlin to sustain its military campaign while facing public dissatisfaction at home. By striking oil infrastructure, Ukraine has achieved dual goals — disrupting Russia’s military logistics while undermining domestic stability.
Recent strikes on facilities nearly 1,000 km from Ukraine reveal a larger vulnerability: Russia’s export terminals. Around 80% of its seaborne oil exports flow through the Baltic and Black seas, both now within reach of Ukrainian drones and missiles. A recent attack on a pumping station forced the Ust-Luga terminal, near Russia’s border with Estonia, to halve its output through September, costing the Russian budget millions. Russia’s oil and gas exports generate over $100bn annually and underpin Russia’s budget, so the attacks have a real effect.
This strategy could prove more effective than Western sanctions, which the Kremlin has largely evaded by redirecting 88% of oil sales to China and India. Direct disruption of physical export routes undermines revenue at source and has the potential to cut far deeper into government finances.
In response, Moscow has escalated attacks on Ukraine’s own energy infrastructure — power plants, substations, gas storage facilities, and even a gas compression station near the Romanian border designed to handle Azeri imports. Ukraine still lacks sufficient air defense to shield its territory, leaving millions vulnerable to blackouts and further humanitarian strain.
This underscores the urgency of Western support. Systems such as Patriot and NASAMS air defense systems help protect Ukraine’s population and infrastructure, while Ukrainian medium-range strike capabilities would allow Kyiv to keep Russian oil exports under constant pressure.
The current cycle of escalation highlights a core truth: a sustainable ceasefire depends on deterrence. Ukraine must be able to blunt Russia’s missile and drone barrages while simultaneously threatening the financial lifeline that fuels the Kremlin’s war.
Western allies have long hesitated to provide Ukraine with the tools for deep strikes into Russia, so Ukraine has developed its own long-range capabilities. Together with a protective network of Western-supplied air defense systems, the dual track approach in offense and defense will strengthen Kyiv’s negotiating position and force Moscow to reconsider its aggression.
Three years of Western sanctions have failed to meaningfully erode Russia’s oil revenues, which were simply redirected to Asia. Ukraine’s strikes, however, have exposed the fragility of the Kremlin’s energy system in ways sanctions never could. By hitting refineries, pipelines, and terminals, Ukraine has disrupted domestic supply, stirred unrest, and constrained exports.
But Russia’s retaliation has shown the cost of this strategy: Ukraine needs more advanced defenses to withstand the inevitable counterattacks. Only then can the balance of power shift decisively, opening the way to a sustainable peace.
Sergiy Makogon is a Non-resident Senior Fellow at the Center for European Policy Analysis (CEPA). He is a seasoned executive and energy expert with over 20 years of expertise in the Ukrainian and Central and Eastern European (CEE) gas markets, as well as European security.