Russia will weather Ukrainian refinery attacks

Significance

Ukraine dramatically increased its drone strikes inside Russia and targeted refinery infrastructure during the first half of 2024. Kyiv was seeking to undermine a source of revenue for Moscow’s budget, to prevent the supply of fuels to invading military forces and to show Ukraine’s population and the outside world that it could hit important targets across Russia. Despite initial fears that the attacks would cause oil prices to spike, the impact on global energy prices has been modest.

Impacts

• In an election year, Washington will likely pressure Kyiv not to disrupt energy too much.
• Non-oil and gas revenues for Russia’s federal budget will continue to grow briskly.
• Moscow will keep attacking Ukraine’s energy infrastructure, which will cause power shortages for months.