Ukraine stated Thursday its long-range aerial vehicles had hit a major offshore petroleum platform in the Caspian Sea this week, in a previously unrevealed mission that indicates a fresh broadening of its objective list in a growing endeavor to sever Russian fuel earnings financing its conflict.
“This is Ukraine’s initial assault on Russian installations connected to oil generation in the Caspian Sea,” an insider with the Security Service of Ukraine reported to CNN, describing it as “another notification to Russia that all its ventures serving the war are permissible goals.” The Filanovsky oil structure, owned by Lukoil, asserts it’s the largest oil deposit in the Russian portion of the Caspian. CNN has sought responses from Lukoil and the Russian Ministry of Defense.
Ukraine’s profound strike campaign against Russian energy premises commenced in earnest at the start of 2024, but since August’s commencement, Kyiv has intensified this push, reinforcing what Ukraine’s sanctions envoy Vladyslav Vlasiuk terms “extended-range sanctions” aiming at Russia’s primary financial support. Ukraine is now impacting an increasingly wide spectrum of objectives including not only refineries but petroleum and gas export facilities, conduits, carriers, and currently offshore drilling infrastructure.
November witnessed the greatest count of assaults yet in a solitary month, according to figures from the Armed Conflict Location & Event Data (ACLED) undertaking, and CNN’s review.
It surfaces at a crucial moment in the struggle. Recent US-led peace attempts appear to have just stiffened Russia’s ultimate demands, and Moscow’s forces are advancing slowly in numerous sections of the front. That, coupled with a worldwide petroleum supply surplus buffering the market against prospective price escalations, signifies Ukraine’s Western partners have turned increasingly supportive of this operation.
“I surmise the overall blueprint since summer is the notion that you must not permit Russia to hold onto so much of its vital energy income that has been powering the substantial personnel recruitment advantage that Moscow possesses over Ukraine,” remarked Helima Croft, global chief of commodity strategy at RBC Capital Markets, referencing Russia’s capacity to afford high wages and signing incentives to enlist soldiers.
“Thus, I do feel it’s a more systematic endeavor to sort of shut that energy ATM.”
Recurring Strikes, Larger Objectives
Between the start of August and the close of November, Ukraine struck at minimum 77 Russian energy assets, nearly double the total for the initial seven months of the year, per ACLED. In November, at least 14 refinery hits and four assaults on Russian export terminals were documented.
Assailing the identical facilities repeatedly is now a central component of the plan. The Rosneft-held Saratov refinery, for instance, has been impacted at minimum eight times since August’s start, with four of those incursions occurring in November.
“What was once sporadic assaults intended to inflict harm has turned into a persistent effort to prevent refineries from ever fully stabilizing,” noted Nikhil Dubey, senior refining analyst at data and analytics firm Kpler, in early December.
Dubey’s investigation demonstrates that repeated strikes on Russian refineries such as Saratov have rendered a considerable quantity of capability inactive and are “decelerating the rate of every mending.” He also judges that since August, Kyiv has been attempting to maximize the effect of its refinery attacks, by striking not only “the visible components of the refinery but the crucial blockages in the refining process that yield the final fuels.”
Sergey Vakulenko, a senior associate at the Berlin-based Carnegie Russia Eurasia Center think tank, who spent 25 years in the Russian oil and gas sector, informed CNN he posits the immediate harm Ukraine has inflicted has been manageable for Moscow for now, but that fails to account for the protracted harm from the significant blazes these assaults tend to induce.
“Metals are not particularly receptive to that form of handling, and nobody truly comprehends how many of these rounds of heating by fire and cooling down these towers could endure,” he disclosed to CNN.
The pattern of strikes also implies Ukraine is no longer attempting to restrict the impact to just Russia’s domestic fuel market. Since August, it has notably augmented assaults on Russian oil export assets.
The harbors of Novorossiysk and Tuapse on the Black Sea and Ust-Luga on the Baltic have each been struck various times. And pipelines are also involved. The Druzhba pipeline transporting Russian oil to the few remaining EU nations that depend on it has now been hit five times since August, prompting protests from Hungary, which maintains a good relationship with Moscow.
In late November, the Caspian Pipeline Consortium, which conveys 80% of all Kazakh oil supplies from Kazakhstan to the Black Sea, announced it had been attacked twice in four days.
The pipeline enterprise, jointly owned by Russia, Kazakhstan, and international petroleum corporations including Exxon (XOM), Chevron (CVX), and Eni, expressed that the second strike had disabled one of its three mooring points for tankers. Ukraine never officially assumed liability for the blow.
The entire terminal ceased operations for two days, according to Homayoun Falakshahi, head of crude oil analysis at Kpler. The Kazakh foreign minister termed it “an act damaging the bilateral ties of the Republic of Kazakhstan and Ukraine.”
Vakulenko suggests this reveals the hazards of this expanding campaign. “I suppose Ukraine desires to instill terror and desires to render it costly for any petroleum tankers navigating into the Black Sea,” he commented, but added: “I think with this, Ukraine gains no goodwill and may incur some expenses.”
The initial two strikes on tankers in late November elicited a rare reaction from Putin, who labeled it “banditry,” and Turkey summoned both Ukrainian and Russian envoys in dissent.
“We possess no alternative instrument than to sever monetary flow to Russia to avert this struggle for survival,” stated Oleksandr Kharchenko, director of the Energy Industry Research Center in Kyiv. The reality these sanctioned vessels were present in that location initially, he argued, plainly confirms Western sanctions are insufficient. “So gentlemen, if you cannot enact your sanctions, perhaps someone (can) assist you,” he proposed.
Western Backing
Two external aspects have enabled Ukraine to boost its energy assaults in recent months. Primarily, a dramatic reversal by the United States.
“It is extremely difficult, if not impossible, to prevail in a conflict without striking an aggressor’s nation,” posted US President Trump on Truth Social in late August. In October, two sources informed CNN the US had augmented intelligence sharing with Ukraine following the failed Alaska summit between Trump and Putin, with an emphasis on energy-related objectives within Russia, hoping to compel Russia toward negotiation.
Europe was also aligned. “By the end of summer not a soul in the room would even mention that Ukraine ought to restrain from hitting any objective,” observed Dovilė Šakalienė, a Lithuanian legislator who served as the nation’s defense minister until this October, in written remarks to CNN. “Growing perception in the minds of Europeans that failure of Ukraine will directly impact our safety within the span of one standard parliamentary term also assisted,” she appended.
“The US persists as an active associate regarding Ukraine’s deep strikes on Russian energy assets, while European confederates have heightened their involvement,” a source associated with Ukraine’s drone program related to CNN.
The second substantial support for Ukraine has been declining petroleum prices driven by a worldwide surplus.
Croft, from RBC Capital Markets, stated she “simply could not imagine that the Trump administration, which has been so concentrated on lower retail fuel costs” would be “so supportive” of Ukraine’s assaults on Russian energy if petroleum prices were elevated.
A Western intelligence source told CNN that Ukraine is receiving supplementary assistance in this endeavor “as required” and “the aim is for these attacks to have repercussions.” The global petroleum markets can “tolerate it,” the source further noted.
How Long Can Russia Endure This?
While Russia remains unyielding in peace talks, its petroleum sector – the preeminent monetary foundation of its war – appears much more precarious than a year ago.
Russia’s petroleum refineries are handling approximately 6% less petroleum than they were at this juncture last year, according to Kpler analyst Dubey. While that figure might seem modest, it’s disruptive for the Russians because “they typically operate with only a small gasoline surplus,” Dubey commented.
Ukraine’s intensifying assaults have also coincided with the first fresh sanctions imposed on Russia since Trump resumed authority in January. In October, Trump announced full constraining sanctions on Russia’s largest petroleum corporations – Rosneft and Lukoil.
Costs for Russian Urals crude have progressively dropped since then to approximately their lowest point in the conflict so far, according to figures from Argus Media, assisting a decline in Russian petroleum export revenues to their weakest point since February 2022, per the International Energy Agency. In November, state media reported Russia’s oil and natural gas earnings diminished almost 34% compared with the same month last year.
Vakulenko posits the strikes on Russian energy assets are merely “one of the components of the scheme” on how to compel Putin to pursue accord.
“I think the extent of fiscal deterioration one needs to impose on Russia is likely more than Ukraine could generate at this juncture,” he opined. “I am convinced that if forced, Russia could probably persist with half of its oil and gas exports.”
For Croft, it’s a matter of whether Ukraine and its partners can maintain their course.
“The convergence of infrastructure assaults centered on export goals, and the endurance of blocking sanctions, I believe that could potentially steer Russia back to the discussion table, but it must be a more extended event,” she concluded.
With Trump now urging Ukraine to accept compromises, this could be a measure of his willingness to do both.
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