Ukraine has escalated drone strikes on Russian oil export infrastructure at a scale experts describe as unprecedented, targeting ports and refineries as Moscow's oil revenues surge amid the Iran-Hormuz crisis, the New York Times reports.
Every barrel Russia cannot export is money it cannot convert into missiles and ammunition. Ukraine's drone campaign against oil infrastructure is one of the few tools Kyiv has to directly shrink the budget financing the war against it.
Ukraine's Defense Ministry described the campaign as "coordinated precision strikes" aimed at depriving the Kremlin of "billions of dollars that are directly converted into missiles and ammunition." Kyiv claimed responsibility for at least 10 attacks last month, though the NYT notes the true number is likely higher.
The most significant strikes have targeted Russia's Baltic ports of Ust-Luga and Primorsk, which together handle roughly 40% of the country's seaborne crude exports. The number of tankers loading oil at both terminals has fallen sharply, according to a Bloomberg analysis of trading activity. Reuters separately reported that Primorsk lost at least 40% of its storage capacity from drone attacks in March alone. On 5 April, a pipeline near Primorsk was damaged in a further drone strike; Russia's fourth-largest oil refinery caught fire in a separate overnight attack the same day.
The revenue question
Whether the strikes actually cut Kremlin income is disputed. Russia taxes oil extraction, not oil sales — meaning damage to ports and tankers primarily hurts the companies selling and shipping crude, while the government's revenue may remain largely intact, energy analysts told the NYT.
Hitting Russian Baltic exports also risks pushing global oil prices higher, compounding strain on a market already squeezed by Iran's blockade of the Strait of Hormuz. Because Russia's extraction tax is pegged to market prices, higher global prices translate directly to higher state revenue. "It's clearly a trade-off," said Damien Ernst, an energy expert and professor at the University of Liège. "Strikes on Russian ports reduce exported volumes. But less volume leads to an increase in prices."
Ukrainian officials contest the logic. They argue that Russian Baltic exports account for a small enough share of global supply to have minimal effect on prices, and that the campaign's goal is to cause enough damage to force Russia to pump less oil altogether. Vladyslav Vlasiuk, President Zelenskyy's top sanctions adviser, said strikes in the last week of March caused more than $500 million in damage to oil storage facilities and reduced export revenues for Russian companies by $745 million — figures the NYT notes could not be independently verified.
"These strikes are disrupting Russia's export system in a measurable way," Vlasiuk said. "We are seeing reduced tanker loadings, irregular port operations, and even 'empty days' at key ports of Primorsk and Ust-Luga — something highly unusual for these hubs. This is about degrading reliability and increasing costs."
The Iran windfall
The campaign comes as the Iran-Hormuz crisis has handed Moscow a significant financial boost. To ease the energy shock from Iran's effective blockade of the strait, the US temporarily lifted sanctions on Russian oil already at sea by mid-March, allowing it to be shipped worldwide. Zelenskyy condemned the move, warning it would help finance the Russian war effort; the Trump administration countered that it would not directly benefit the Russian budget because the oil at sea had already been taxed. US sanctions have remained in place on Russian oil that had not yet left port by mid-March; EU countries have also maintained their sanctions regime.
Disruptions to Persian Gulf supplies have also boosted demand for Russian oil among countries that do not apply Western sanctions, including China and India. Sergey Vakulenko, a senior fellow at the Carnegie Russia Eurasia Center in Berlin and a former top manager at Gazprom Neft, estimated that if production holds steady the Russian government could collect at least $12.8 billion in oil taxes in April — double March's revenue. Data from the Centre for Research on Energy and Clean Air show Russia earned €7.7 billion from fossil fuel exports in the first two weeks of the Iran war alone.
Janis Kluge, a Russia expert at the German Institute for International and Security Affairs, said Washington may extend its sanction relief beyond its mid-April expiry and potentially broaden it to allow more Russian oil onto world markets.
Ukraine's campaign
Ukraine's oil strikes began in early 2024, initially targeting Russian fuel supplies to frontline forces and triggering domestic gasoline shortages inside Russia. As Ukraine's long-range drone fleet expanded, the strikes' cumulative impact grew: by last September, roughly 20% of Russia's refining capacity had been destroyed or damaged.
Combined with falling global prices, US sanctions on Russia's two largest oil producers, and tighter enforcement against the shadow tanker fleet, Russia's oil and gas revenues fell by nearly a quarter last year — opening what Ukrainian officials described as a significant hole in the government's budget.
Vakulenko said Russia can continue pumping and store surplus oil for a time, but storage capacity is limited. With prolonged export disruptions, "at some point Russia would have to curtail its production." He called the campaign potentially decisive: "If they can sustain this string of attacks, it could be a game changer. But that remains to be seen."
Rerouting exports away from the Baltic would be difficult, according to Kluge: alternative routes are either offline — such as a major pipeline supplying Eastern Europe — or under threat from Ukrainian attacks, as with Black Sea ports. Ukrainian sea drones have also reportedly struck tankers linked to Russia's shadow fleet in the Black Sea, though Kyiv has not formally claimed responsibility.
Zelenskyy said he had "received signals from some partners about reducing our responses against Russia's oil and energy sector," adding that Kyiv would only scale back if Moscow also halted attacks on Ukraine's energy grid. The same weekend, Ukraine announced emergency power outages following a "massive missile and drone attack" on its energy infrastructure.
Ukraine has also been sharing its battlefield-honed expertise in air defense with several Middle Eastern partners, providing technical guidance on countering drone and missile threats. Officials in Kyiv frame this cooperation as part of a broader effort to strengthen collective defenses against the kind of aerial warfare Russia has unleashed on Ukraine.
