Fuel expensive and scarce How Kiev's campaign against the Russian energy industry is making Putin sweat
While Kiev only rarely manages to achieve success on the front line, a campaign by the armed forces in Russia is apparently more effective: fuel prices are rising there after targeted drone attacks and logistics are also running out. Can the Kremlin afford this in view of the budget crisis?
No time? blue News summarizes for you
- Thick air in Novoshakhtinsk: the refinery has been burning for five days. There is no more water in the surrounding area because everything had to be diverted to fight the fire.
- Ukrainian drones have interrupted oil exports via the Druzhba pipeline and the Usta-Luga terminal.
- At least seven refineries were attacked in August - with this result.
- Infrastructure that was built with Western aid can no longer be replaced.
- Fuel prices in Russia are at record highs and there is little fuel left in the periphery.
- Impact on logistics: 70 percent of goods are transported by road.
- Kiev's campaign is putting a strain on Russia's already tight coffers.
- With the new Flamingo missile, Ukraine can expand its campaign even further.
It has been five days since the Ukrainian armed forces attacked the Russian refinery in Novoshakhtinsk in the Rostov region. And the plant has been burning brightly since August 21.
The air must be stifling. The situation is so precarious that the fire department has turned off the water to the surrounding villages and towns. According to the authorities, it will flow again as soon as the water reservoirs are refilled and the pressure in the pipes is restored.
412 firefighters are on duty in Novoshakhtinsk - including a fire engine. The refinery was reportedly protected by two anti-aircraft units: a 96K6 Panzir and a 9K330 Tor. It was no use: Kiev has allegedly taken 1.7 percent of Russia's refinery capacity offline.
Kiev spoils Putin's export business
This is not the first time that Ukraine has attacked the Novoshakhtinsk refinery, which is one of the largest in the south of the country. The situation was apparently already tense before the latest attack: The operators have reportedly not paid wages for five months.
It is also not the only blow that Vladimir Putin's energy industry has taken in August. On the one hand, the Ukrainian military is aiming to torpedo Russia's exports - for example by attacking a pumping station in Unetsha in Bryansk Oblast, which interrupted the flow of oil through the Druzhba pipeline and led to trouble in Hungary.
A pipeline also runs from Unetsha to an important Russian transshipment point on the Baltic Sea, which has also just been attacked: On August 23, a Ukrainian drone swarm descended on the oil and gas terminal in Ust-Luga. The extent of the damage is still unclear: it is assumed that the terminal is out of operation.
Irreplaceable refineries in the crosshairs
In addition to these export hubs, Kiev has been targeting Russian refineries since the beginning of the month. Four of them have reportedly had to cease production as a result: in Vologograd (owned by Lukoil), Novokuibyshevsk, Saratov and Sysran (all Rosneft).
The refinery in Ryazan is one of the largest in the country and supplies the greater Moscow area. Production capacity there has halved following a Ukrainian attack, reports Reuters. Sometimes the attacks have far-reaching consequences.
According to the Financial Times, if inventory that was created in cooperation with Western companies is destroyed, it can no longer be replaced for the time being - or at all - due to the sanctions. The background: companies such as BP, Shell and Exxon were significantly involved in the development of the new energy infrastructure in Russia.
Rising fuel prices and closed petrol stations
Kiev's campaign is having an effect: the oil price rises by two percent as a result of the attack in Russia. However, the Kremlin is not benefiting from this because it has fewer opportunities to process the black gold. As a result, petrol prices in Russia have risen by 32 percent since the beginning of the year.
Fuel is even becoming scarce in parts of the country. Not in Moscow or St. Petersburg: Putin cannot afford to upset the people in the populous centers of power. But there are problems on the periphery: in the Kuril Islands, in Russian-controlled Abkhazia in Georgia or in the occupied territories in Ukraine.
Kiev's strategy not only affects motorists or the military, who now have less kerosene at their disposal. The Ukrainian planners are also likely to have had in mind that truck traffic plays an important role in Russia's logistics.
Logistics is also being slowed down
In fact, 70 percent of containers are transported by road: The drone attacks on the energy infrastructure therefore have what it takes to slow down the entire economy if its logistics paralyze. Volodymyr Zelensky is thus driving up the cost of war for Moscow, while prices for consumers continue to rise.
Logistics appears to be another focus of the Ukrainian campaign: In recent days, a railroad line in Rostov oblast and a train station in Petrov Val in Vologograd oblast have been attacked. In Dzhankoy in Crimea, drones set fire to a tanker train.
Just a few days ago, two Russian trains were hit in occupied Zaporizhia, one of which was carrying diesel supplies to Tokmak. A video shows that even jammers on the train were unable to stop the Ukrainian drones.
How much longer can Putin afford the war?
"Ukraine is stepping up its attacks on Russian energy supplies - and it's working," summarizes CNN. At the same time, "Bloomberg" warns that Putin's war economy is stagnating, while "Reuters" reports that the Kremlin is having to consider austerity measures and tax increases due to tight budgets: the deficit now stands at 49 billion francs.
Accordingly, Anatoly Artamonov, who sits on the Duma's Finance Committee, warned back in July: "In view of the more pessimistic estimates of economic indicators and the decline in oil and gas revenues, we urgently need to start consolidating the budget." This was before the recent Ukrainian attacks on oil and gas facilities.
"Russia is 'on the brink of recession' and heading for a disastrous harvest, while Putin's other major source of revenue is collapsing," recognizes "Fortune" about Russia's tense economic situation, which could soon get much worse.
The reason for this is Kiev's new long-range weapon: the FP-5 Flamingo, with its range of 3,000 kilometers, puts a large number of other targets within Ukraine's striking distance. 87 percent of refineries are now at risk. Will Volodymyr Zelenskyi, who cannot beat Vladimir Putin on the battlefield, succeed in forcing the Kremlin to make peace through his wallet? The fall will show.
