Ukraine Launches Fresh Attacks on Russian Oil Infrastructure

In recent weeks, Ukraine has ramped up attacks on Russian oil infrastructure, particularly areas near the Black Sea and Baltic Sea.

As the US-Iran War rages on, many have forgotten about the ongoing conflict between Ukraine and Russia, which began in February 2022 and has seen almost continuous strikes between the two countries for more than four days.

Several weeks ago, US President Donald Trump announced that he would be lifting sanctions on Russian oil as part of an attempt to lower fuel prices, which had skyrocketed in the early days of the war in Iran. With the Strait of Hormuz closed, other oil providers ramped up exports, and the Trump administration's move to un-sanction Russian oil permitted them to do the same.

However, this came at the expense of Ukraine– Russia had already been running low on funds due to the extreme sanctions placed on them at the beginning of the war. With the removal of sanctions, Russia could now sell oil to any country in the world, turning their oil into an option for dozens of nations, and more importantly– it has allowed them to begin replenishing their depleted money reserves.

According to the Financial Times, the Russian government earned somewhere between $1.3 and $1.9 billion in taxes on oil exports within the first two weeks of the war, with estimates placing their extra revenue at approximately $150 million per day.

Because of this, Ukraine has chosen a different approach towards limiting Russian exports. Instead of striking ships or blocking off waterways, Ukraine is directly striking Russian oil infrastructure all over the country.

On Sunday, Ukraine struck the Sheskharis oil terminal in the city of Novorossiysk, located along the Black Sea. As a whole, the city's port is Russia's largest seaport– it sees more than 6,000 vessels annually and handles around 100 million tons of cargo each year. Videos circulating online showed the oil terminal ablaze, and local reports confirmed that other ports and cities had also been targeted by drones.

Meanwhile, Ukraine also sent attacks farther north, towards the Leningrad Oblast. Located along the Baltic Sea, Leningrad is home to St. Petersburg, a prominent tourist destination that has been largely unaffected by the war, until now. Ukraine's attacks on Leningrad hit the ports of Primorsk and Ust-Luga, which are the most crucial ports in the country for crude.

Together, they make up more than 40% of Russia's total crude export capacity, and considerable damage was reported after the Ukrainian strikes. The number of tankers loading oil at the port fell significantly following the attacks, and local reports confirmed that the damage could take time to restore.

However, according to the New York Times, Russia taxes oil extraction, not oil shipping. Because of this, Ukrainian strikes on Russian ports affect the shipping and distribution of the oil, but the Russian government makes the same revenue whether the oil is exported or not.

Higher fuel prices across the globe are also enabling Russia to charge a higher tax on oil extraction, meaning that Ukraine must launch massive, coordinated strikes to prevent Russia from simply reducing exports and ramping up prices. Nevertheless, if Ukraine is successfully able to dent Russian exports enough where the government runs out of storage capacity, it could begin to impact their financial state.

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Image credit to AP