Ukrainian Suicide Drone Attack Sparks Fire at Russia's Volgograd Oil Refinery
Escalating Drone Attacks on Russian Energy Complex
Despite numerous warnings from the Biden administration, the Ukrainian military continues to intensify its kamikaze drone attacks on the Russian energy complex. This strategy is aimed at disrupting Russia's crude oil and crude product export revenues and limiting Moscow's capability to finance President Putin's 'special operation' in Ukraine.
Latest Suicide Drone Attack on Lukoil PJSC's Oil Refinery
The most recent suicide drone attack occurred early Sunday at Lukoil PJSC's large oil refinery in Volgograd, deep within Russia and hundreds of miles east of the Ukrainian border, as reported by Bloomberg. Governor Andrey Bocharov stated on Telegram, "During the night of May 12, the air defense and electronic warfare forces fought off a drone on the territory of the Volgograd region."
Unverified Claims of Successful Strikes
Unconfirmed reports on X, one from OSINTtechnical, stated, "Overnight, Ukrainian forces successfully struck the Lukoil refinery in Volgograd, Russia. At least one drone hit the complex, reportedly setting the ELOU AVT-1 refining unit on fire." Belarus media outlet Nexta also reported, "UAVs attacked an oil refinery in Russia's Volgograd region. Propaganda media reported that after the strike, a heavy fire broke out."
Volgograd Refinery's Capacity and Previous Attacks
Bloomberg highlighted that "The Volgograd refinery is capable of processing 14.8 million tons of oil a year and is among Russia's largest. It was previously struck by drones in February, when it temporarily scaled back some of its operations."
Recent Drone Strikes on Other Facilities
On Thursday, a Ukrainian drone targeted Gazprom PJSC's Salavat Neftekhim, a leading petrochemical and oil-refining facility. On Friday, a drone strike targeted a smaller refinery in the Kaluga region.
Concerns Over Global Oil Prices
In March, FT reported that the Biden administration was concerned that Ukraine's drone strikes "risked driving up global oil prices." In April, US Defense Secretary Lloyd Austin cautioned Ukraine that drone and missile attacks should not target energy infrastructure but should focus on military targets due to the risk of sending Brent crude prices over $100/bbl.
Impact on Russia's Refining Capacity
In mid-April, Reuters estimated that Russia's refining capacity, which was offline due to drone attacks, was around 660,000 barrels per day, compared to 907,000 bpd offline at the end of March. Russia has stated it can repair all damaged units within two months. Russia's Energy Minister Nikolai Shulginov said all damaged refineries would be restarted by the beginning of June.
Objective of the Refinery Drone Attacks
The primary aim of the refinery drone attacks by Ukraine is to undermine Moscow's war funding by curtailing crude product (such as diesel) exports. Foreign Affairs magazine writer Sam Winter-Levy recently wrote a note titled "Why Ukraine Should Keep Striking Russian Oil Refineries," explaining that "with less domestic refining capacity, Russia will be forced to export more of its crude oil, not less, pushing global prices down rather than up."
Possible Implications of Continued Drone Attacks
If Biden's foreign policy is to keep Brent prices below $90/bbl before the November presidential elections, and if Levy's analysis is correct, then this could mean more drone attacks. However, this risks further escalating the conflict as no peace deal is in sight and the world edges closer to World War III.
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