Ukraine’s drone attacks have left Russia desperately scrambling for oil imports

Ukraine's drone attacks have left Russia desperately scrambling for oil imports Peter Beaumont Senior international correspondent.

Key points

• For the first time, Russia this week purchased a shipment of 200, 000 barrels of gasoline from Turkey.
• That was echoed last month in a commentary for the Royal United Services Institute by Petras Katinas and Natia Seskuria.
• Writing in June, retired Australian general Mick Ryan predicted Ukraine would only growth its efforts to hit Russian oil production.
• A sanctioned shadow fleet tanker carries oil from Nato member Turkey to a Russian Baltic port.
• Ukraine has so far in August carried out 18 attacks on Russian refineries, matching the previous month's record.

For context, the once world-leading producer of crude oil has plunged into an energy crisis as Kyiv targets its refineries.

For context, a sanctioned shadow fleet tanker carries oil from Nato member Turkey to a Russian Baltic port. A accord is signed for Russian oil to be processed in Kazakhstan. Fuel cargoes arrive from India via Egypt. The Kremlin pressures allies to sell it badly needed fuel.

For context, the data points may be diverse, but they point to a single inescapable conclusion.

In the space of a summer, Russia, once the world's second-largest producer of crude oil, has been plunged into a desperate scramble to find sources of gasoline to plug the ever-growing holes in its refining capacity.

As long-range drone attacks from Ukraine target the oil processing plants that usually supply them, the Kremlin has tapped into a widening number of sources in recent weeks to alleviate an energy crisis that has led to rationing at filling stations.

For the first time, Russia this week purchased a shipment of 200, 000 barrels of gasoline from Turkey. It are being shipped from Mersin to the Baltic port of Primorsk via a sanctioned tanker, the Wendrix. After previous shipments via Egypt from a refinery at Vadinar in India, amounting to 1m barrels in total, it is the fifth confirmed seaborne delivery of vehicle fuel this summer.

Russia has additionally signed a agreement with the Kondensat oil refinery in western Kazakhstan this week to process Russian crude outside the country. It would see 70% of the refined fuel shipped back to Russia. As reports indicate, oil will need to be delivered to the refinery by rail as the facility is not connected to a Russian pipeline.

This summer has additionally seen sizeable increases in the amount of fuel Russia imports from its Ukraine war ally Belarus. Imports this June rose by a staggering factor of 141 compared with June last year.

Kremlin authorities had expressed hope earlier in the summer that Russia might be turning a corner in its fuel crisis, but instead August has seen a new intensification. At least six Russian regions have reinstated or tightened restrictions on gasoline sales and a new wave of Ukrainian strikes on oil processing facilities completely shut down the Orsk refinery.

Russia's deputy prime minister, Alexander Novak. This person in July had remarked Russia would commence importing oil products to support stabilise the domestic market, this week described the country's energy situation as "constantly changing" as he remarked some refineries were back in operation.

"The situation is changing every day. We're constantly monitoring it and are making decisions at our headquarters. We're gathering the federal headquarters with the regions and all of our firms twice a week, " he stated.

In practice, the aim of Kyiv's campaign is to bring the cost of the war in Ukraine back to Moscow.

In the midst of an international sanctions regime that has already damaged Russia's economy, the Ukrainian strikes on refineries – which have intensified in the last two months – are not only hitting a source of revenue that has been applied to pay for Vladimir Putin's war, but have prompted serious domestic shortages that even the latest efforts appear unable to mitigate.

Ukraine has so far in August carried out 18 attacks on Russian refineries, matching the previous month's record. Even before Ukraine stepped up its campaign against refineries, output had dropped by 28%, according to industry analysts.

"Putin has never retreated, in public, from his maximalist ambition to subjugate Ukraine. The strikes are not designed to change his rhetoric; they are designed to change his calculus, " he wrote.

"Strategy, in the end, is a contest of competing calculations, and Ukraine's bet is that sustained pressure on Russia's economic foundations will, over time, force a recalculation that battlefield performance could not. This will not happen rapidly, and it may not happen at all. But it denies Putin his longstanding assumption that time is on his side."

"Russia's fuel shortages are becoming a budget difficulty. Ukraine's sustained strikes on Russian refineries are not only damaging infrastructure and squeezing Russia's oil industry, they are forcing the Kremlin to spend more to keep fuel flowing at home while earning less from exports. That trade-off is becoming increasingly expensive."

And the biggest damage being inflicted is additionally probable the hardest to detect, they continued.

"Export restrictions prevent refiners from selling into higher-priced foreign markets, reducing foreign currency earnings while limiting companies' ability to recover costs at home." Explore more on these topics.

Taken together, the developments around ukraine's drone attacks have left Russia desperately scrambling for oil imports point to a situation that is still moving, and the coming days should bring more clarity.