The tit-for-tat missile and drone strikes between Russia and Ukraine went up another notch on May 17 after the Armed Forces of Ukraine (AFU) launched its biggest drone strike on the Russian capital since the war started.

Moscow has largely been off limits for Ukraine’s drones, but that has changed in the last few weeks. Only days before Russia’s annual Victory Day parade in Moscow on May 9, Kyiv hit a high rise luxury residential building in central Moscow in a premeditated threat to strike the parade a few days later that is attended by Russian President Vladimir Putin personally every year.

As tensions rose, the Kremlin threatened to flatten central Kyiv in retaliation if the scaled down parade was attacked, causing thousands of Kyivians to leave the city the day before. Eventually nothing happened and Ukrainian President Volodymyr Zelenskiy backed off, issuing a tongue-in-cheek decree giving Putin “permission” to hold the parade and specifically designating Red Square as a no strike zone – including the precise GPS coordinates in the text of the decree.

However, the gloves came off on May 17, with large-scale strikes on the city of Moscow and the surrounding Moscow region. Oil refineries were burning, military factories were hit with rockets which produce microelectronics, semiconductors, and microprocessors for the Russian war machine.

“The fact that some drones over Moscow can make these turns without being impeded speaks volumes. More than 300 drones were used for the operation against targets in Moscow, Russia, and they have likely overwhelmed in some areas the Russian air defence,” said German military blogger Tendar.

Despite Russia’s layered air defences, Ukrainian forces reportedly struck several targets across the Moscow region. According to preliminary reports, 12 people have suffered injuries in drone attacks on Moscow, the city’s Mayor Sergey Sobyanin said towards the end of the day.

Among the larger and more significant assets to be hit were a Transneft facility, Russia's largest oil transportation company, and the Sheremetyevo International Airport, just outside the city centre. The Solnechnogorsk petroleum products loading station in the village of Durykino was hit and the Elma technopark in Zelenograd, an enterprise specializing in electronics manufacturing that was engulfed in flames. Ukrainian forces also targeted the MKB Raduga plant in the Moscow region. MKB Raduga is a Russian engineering design bureau specializing in the development of cruise missiles and other missile technologies.

"According to preliminary reports, 12 people were injured in drone attacks. In particular, construction workers suffered injuries at the entrance of the Moscow Refinery. The facility’s operation has not been affected," he wrote on Max. Sobyanin added that three residential buildings had been damaged. According to him, over 120 drones flying towards Moscow were shot down in the past 24 hours.

Until now Ukraine has been running an escalating campaign of targeting Russian refineries since last summer in an effort to reduce Russia’s oil export income. That a crescendo earlier this month with repeated attacks on the main Baltic sea terminals of Primorsk and Ust-Luga. Last week the government admitted that between 10-15% of Russia’s refining capacity has been taken offline and may reduce this year’s oil production by about 10%, or 1mn b/d. However, the budget revenues are unlikely to be impacted as rising price of oil will more than offset the fall in production: the Ministry of Finance (MinFin) just upgraded its estimate for the average cost of a barrel of oil in the budget from $77 to $96 for April – an increase of almost a third.

Ukraine continues to expand its drone production – roughly doubling every year. This year Ukrainian President Volodymyr Zelenskiy has Ukraine on course to produce 7mn drones this year and last month for the first time fired more drones into Russia than Russia fired into Ukraine since the war began. Ukraine launched 7,000 drones into Russia in March alone. In April, Ukraine carried out 300% more medium-range strikes and recorded over 35,000 Russian casualties. President Zelenskiy said, following a report from military leadership and the minister of defence. According to the president, there are now twice as many hits at distances over 20 kilometers as in March and four times as many as in February.

The escalated Ukraine drone attacks follow on from a devastating Russian missile barrage last winter, as Russian President Vladimir Putin attempted to freeze Ukraine into submission during the big freeze, one of the coldest winters in decades, using an expanded missile arsenal combined with waves of hundreds of drones to delete Ukraine’s air defences of strategic targets.

Russia has also ramped up its drone production at its drone factory in the Alabuga Special Economic Zone in Tatarstan and continues to innovate with new drones like the Geran-5. However, Russia retains a clear lead in missile production. It will double the number of missiles it produces this year to well over 2,000, including new extremely powerful models such as the Sarmat cruise missile that was rolled out last week and can hit any target on the planet. Ukraine has also developed the Flamingo cruise missile which it has started to use more frequently, but only produces as yet small numbers.

Ukraine is hoping to take the lead in drone production as part of the Drone Alliance with European partners, under the so-called Danish model of joint ventures. The Kremlin has threatened that if European countries set up drone production facilities on their territory that are used in the Ukraine conflict it may consider these facilities as legitimate military targets and strike them with missiles, even if they are housed on Nato member’s territory. Russia has also threatened to hit Ukrainian drones flying over Nato airspace in Romania and the Baltic states on their way to hit Russia’s Baltic ports.

According to President Zelenskiy, 20 countries are interested in cooperating with Ukraine under the Drone Deal. Four agreements have already been signed, and the first contracts are being prepared.