Russia’s oil industry, long seen as the bedrock of the country’s economic strength, is being slowly degraded—not by sanctions or falling demand, but by the persistent and methodical pressure of Ukraine’s drone attacks.

Ukraine doesn’t have the missile firepower to deliver a knockout blow of Russia’s oil refineries. But it can keep hitting them and damage them faster than Russia can repair them. While dramatic collapse is unlikely, Tatiana Mitrova and Sergey Vakulenko argue in a recent article in Foreign Affairs that “the real damage caused by Ukraine’s campaign is cumulative and institutional, not physical.”

Mitrova, a Global Fellow at the Center on Global Energy Policy at Columbia University, and Vakulenko, a Senior Fellow at the Carnegie Russia Eurasia Center in Berlin, highlight a paradox at the heart of Russia’s current crisis: a country rich in oil, yet increasingly fuel-poor. The latest shortages stem not only from the destruction wrought by Ukraine’s drones, but also from an inflexible energy system, distorted market signals, and heavy-handed government intervention. “Each new layer of government intervention or control tightens the state’s grip over the sector,” Mitrova warns.

This summer, Ukraine launched an increasingly effective campaign against Russia’s oil refineries, which has damaged over half of Russia’s 38 major installations since August. Long-range drone strikes are reshaping the way the Kremlin manages its energy sector. Though Russia still maintains enough refining capacity to prevent outright collapse, according to the authors, repeated hits are stretching its repair capabilities and exhausting spare parts already limited by Western sanctions.

“This is a game where the attacker has the advantage,” Vakulenko notes, pointing to Ukraine’s ability to shift targets unpredictably while forcing Moscow to overstretch its defences. Most of its air defence weaponry is in Ukraine protecting military installations.

Unlike previous years of war, Ukraine’s new drones are more powerful and can fly further. They now strike refineries far from the frontline—including as far as Tyumen, over 1,300 miles from Ukrainian territory. Plants like the Volgograd refinery have been hit multiple times, never given enough time to fully recover. This, the authors suggest, is creating “a carefully calculated war of attrition,” in which Ukraine is not trying to destroy Russia’s oil sector in a single blow, but to wear it down over time. Tactically, Ukraine has little other option. Unlike Russia, which produces something like 2,500 powerful missiles a year that can flatten Ukrainian power assets, Ukraine has only a handful of missiles, but now produces some 4.5mn drones a year, according to Ukrainian President Volodymyr Zelenskiy. The payload they can carry has increased but is still an order of magnitude less powerful than Russia’s missiles.

The Kremlin’s response has been containment and control. Temporary fuel export bans, regional price caps, and delivery quotas have stabilised prices in the short term but at the expense of long-term efficiency. “The tools it relies on—export bans, fixed margins, subsidies—are locking the sector into stagnation,” Mitrova states.

Even more counterintuitively, refinery outages have not significantly reduced Russia’s oil export revenue, at least not yet. The estimates of how badly affected production has been are in the range of 10%-30% but Vakulenko recently updated the change for the year-on-year average and estimates total oil product reduction has only been 3% as of the end of the third quarter. But this reduction will build over time in a sustained campaign.

Part of the mitigation to the Kremlin’s export revenues is that when refineries go offline, crude that would otherwise be processed is shipped abroad and so still pays. The Russian state, which taxes wellhead oil, continues to generate revenue, but oil firms suffer. “The losses from selling low-priced crude instead of refined oil products can reach $10 per barrel or more,” Vakuleno explains.

Ukraine’s strikes are also extending beyond Russia’s borders, targeting pipelines, terminals, and vessels involved in transporting Russian oil. There are also reports of Ukrainian special forces attaching limpet mines to ships in Russian ports that are then detonated thousands of kilometres away, en route to their final destination. Sabotage incidents have also been carried out in the Black Sea and strikes on the Caspian Pipeline Consortium’s facilities.

The goal, according to Mitrova, is not just military: “Strategically, they are meant to dissuade third parties—ship owners, insurers, and traders—from doing business with Russia.”

In October, Russia retaliated by launching missile and drone attacks that knocked out 60% of Ukraine’s domestic gas production for the first time and ending the tacit agreement that had spared Ukraine’s gas infrastructure as long as Russian gas flowed westward. The result, so far, has been escalation rather than deterrence.

The industry’s future depends on three variables, the authors argue: Ukraine’s strike tempo, Russia’s repair capacity, and global oil prices. Each constrains Moscow’s room for manoeuvre. “Refineries are still running, but with deferred maintenance, rushed emergency repairs, and a mounting backlog of safety and efficiency issues,” Mitrova observes.

In the long run, the threat to Russia’s oil industry may not be sudden destruction but a kind of operational petrification. The sector continues to function, but with declining margins, increased state interference, and eroded institutional capacity. “Russia’s refineries are most likely to wear out under the weight of repeated shocks and institutional sclerosis,” Vakuleno concludes—a quiet metaphor, perhaps, for the war economy itself.