Ukrainian drones disrupt Russian refineries amid rising fuel prices

Russia, a major energy producer, has recently experienced a significant surge in wholesale gasoline prices due to a series of drone strikes on its refineries. These strikes, attributed to Ukrainian forces, began in early August 2025 and targeted several key facilities, including those operated by Rosneft and Lukoil. Specifically, these attacks have halted production at least three major refineries, sparking concerns over fuel supplies and impacting the energy market. Prices for Ai-92 and Ai-95 gasoline soared to 71,500 and 80,430 rubles per ton respectively on the St. Petersburg International Mercantile Exchange, marking increases of 38% and 49% since the year began. The situation has escalated as Ukraine's military has focused its efforts on disrupting Russia's energy infrastructure, which is essential for funding its ongoing conflict in Ukraine. Reports indicate that the strikes have resulted in severe shortages of gasoline in occupied regions like Crimea, where Ai-95 has disappeared from many gas stations. Local enterprises have begun receiving fuel only via coupons, highlighting the precarious nature of supply chains amidst ongoing conflict. Despite the alarming escalation and statistics indicating that such attacks have caused losses amounting to approximately $74.1 billion, or 4.11% of Russia's GDP, Russian authorities, including the Energy Ministry, have sought to assure the public that the situation is manageable. They claim that domestic fuel deliveries are increasing and that logistical problems are not evident, asserting that supply remains sufficient to meet demand. However, the continued frequency of these attacks raises questions about the long-term stability of Russia's energy resources and their availability for both domestic and military needs. As of August 19, 2025, the economic implications of these events are unfolding in real-time, with analysts closely monitoring both domestic and international reactions to Russia's rising fuel prices and the effectiveness of Ukraine's military strategy in targeting its adversary's crucial infrastructure. The ongoing drone strikes underline the intertwining nature of military operations and economic impacts, generating both immediate and long-term repercussions for the energy market in Russia.