A devastating Ukrainian strike has wiped out 100,000 tons of Russian oil, dealing a major blow to Moscow’s exports and revenues. In response, Putin is doubling down on his shadow fleet—here’s what’s at stake
Russia’s oil industry is facing one of its most severe crises following a Ukrainian strike that destroyed a strategic 100,000-tonne oil storage facility in the Krasnodar region.
The attack, which took place on March 19, completely obliterated the Naftatrans Kavkazskaya storage site, triggering massive explosions and uncontrollable fires. The loss of such a substantial volume of oil is not only a blow to Russia’s energy supply but also a key development in the ongoing economic confrontation between Moscow and the West.
With sanctions already in place and exports declining, the destruction of this facility adds another layer of pressure on the Kremlin. Russia now faces an export crisis that is further straining its economy, while Putin scrambles to implement new strategies to keep oil flows moving despite international restrictions.
Here’s how the attack has impacted Russia’s oil trade—and what the Kremlin is doing to mitigate the damage.
Russian Oil Trade: A Sector in Crisis
The Ukrainian strike on the Naftatrans Kavkazskaya depot has exposed the vulnerability of Russia’s energy infrastructure. The facility, linked to the Caspian Pipeline Consortium and a key rail terminal, was a crucial hub for Russian oil exports. The destruction of 100,000 tonnes of fuel has inflicted significant economic damage, further constraining export volumes.
According to data from Energy and Clean Air, Russian revenues from fossil fuel exports were already in decline before the attack, falling by -3% in February to €640 million per day. The steepest drop occurred in maritime crude oil transport, which saw a -13% monthly decline, with total export volumes down -9%. The destruction of the Krasnodar facility could exacerbate this negative trend, making it even more challenging for Moscow to maintain its export channels.
While Russia’s primary buyers—China and India—absorb 85% of its crude oil exports (with Beijing accounting for 47% and New Delhi 38%), Western sanctions have forced Moscow to adopt alternative tactics to bypass restrictions. These include selling oil through intermediaries and utilizing untraceable fleets. The Ukrainian attack has not only disrupted a key infrastructure but has also intensified Russia’s struggle to maintain stability in its energy market.
Putin’s Counteroffensive: The Shadow Fleet
To navigate the crisis and evade Western sanctions, the Kremlin is doubling down on a well-established strategy: expanding its so-called “shadow fleet.”
This term refers to a network of oil tankers that operate outside conventional regulatory frameworks, avoiding international scrutiny and restrictions. According to Ukrainian intelligence, Russia has already expanded this fleet to approximately 400 ships, many of which are registered in jurisdictions such as the United Arab Emirates, the Seychelles, Hong Kong, and the Marshall Islands.
Seaborne oil exports remain a critical pillar of the Russian economy, generating over €80 billion annually. The shadow fleet enables Moscow to keep oil flows active by employing tactics such as ship-to-ship (STS) transfers in open waters, making it more difficult to trace the oil’s origin. This system has allowed Russia to bypass many Western-imposed restrictions, but with the destruction of a key storage facility, the logistics of these operations have grown increasingly complex.
At the core of this strategy lies the Kremlin’s determination to protect its oil revenues, which constitute a vital portion of the state budget. Despite mounting challenges, Putin remains committed to maintaining a foothold in global energy markets, diversifying sales channels to counteract the impact of sanctions. However, the recent attack underscores how Ukraine is pursuing a precision-targeted approach to strike at Russia’s economic lifelines, pushing Moscow into an ever-deepening crisis. The future of Russia’s energy sector is growing more uncertain, with potentially destabilizing consequences for the Kremlin.
Original article published on Money.it Italy 2025-03-23 12:56:00. Original title: 100.000 tonnellate di petrolio sono andate distrutte, Russia nei guai
