Oil price hike 'softens' Ukraine's deep-sea attacks on Russia

The drone strikes are aimed at undermining one of Moscow's main sources of war funding. However, rising global oil prices and developments in the Middle East are helping the Russian economy weather the blows. The full economic impact remains unclear, as the strikes increasingly affect areas far from the front lines.

Ukrainian drones are flying deep into Russian territory to strike oil facilities, creating huge clouds of smoke that can be seen from space and bringing toxic rain to tourist destinations on the Black Sea.

The attacks are aimed at cutting off Moscow's oil exports, a key source of funding for its invasion of Ukraine. However, the economic impact remains unclear, as rising oil prices due to the war with Iran and the easing of some US sanctions have helped boost the Kremlin's revenues.

However, the scale of the attacks and their impact on the environment are bringing the war closer to ordinary Russian citizens, even in areas far from the front lines.

Ukrainian drones have struck a refinery and export terminal in the Black Sea coastal city of Tuapse four times in just over two weeks, sparking fires that forced the evacuation of residents and sending huge plumes of smoke into the air. The city is about 450 kilometers from the front line.

In a video released by local governor Veniamin Kondratyev after the third attack on April 18, an emergency official said that petroleum products had spilled onto the road, damaging cars.

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Ukraine announced on Thursday that it had struck another oil pumping station in Russia's Perm region, more than 1.500 kilometers from Ukraine, for two consecutive days. Russian media reported the attacks, while Perm Governor Dmitry Makhonin said only that the drones had hit industrial facilities.

Ust-Luga on the Baltic Sea, one of Russia's largest oil and gas export terminals, was hit three times in a week in late March. The terminal is located more than 800 kilometers from Ukraine.

A few weeks later, regional governor Alexander Drozdenko declared that the area around St. Petersburg, Russia's second largest city, had become a "frontline zone" due to air threats.

Ukrainian President Volodymyr Zelensky has likened the attacks to international sanctions against Russia, which he sees as even more important now that Moscow is taking advantage of the global energy crisis caused by Iran's closure of the Strait of Hormuz.

Zelensky said on Friday that Russia has lost at least $7 billion since the beginning of the year as a direct result of attacks on its oil sector. Earlier in the week, he said Ukrainian intelligence indicated a decline in exports from key ports such as Ust-Luga and Primorsk.

Drone attacks have also disrupted oil refining capacity in Russia, while sanctions make it difficult to secure replacement parts, experts say.

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However, the full economic impact remains unclear, as Russia is benefiting from the crisis in the Middle East.

Russian exports of crude oil and its products rose by 320.000 barrels per day month-on-month, to 7.1 million in March, according to the International Energy Agency. The rise in prices has helped oil export revenues nearly double, from $9.7 billion to $19 billion. It is not yet clear whether the April attacks will reverse that trend.

"US sanctions on Iran have saved the Russian oil sector and the federal budget from a crisis that was clearly developing in late February," said Chris Weafer, chief executive of the consulting firm Macro-Advisory.

He added that the damage to Russia's oil infrastructure is much less than it appears in the spectacular footage of the explosions.

"If it hits an oil depot, especially one that's not full, the vapors catch fire and create very dramatic scenes. But that only delays deliveries for a few days," he said.

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"It's much less damaging than hitting pumping stations, compressors or loading infrastructure. And it seems that these are well protected. The tanks are not," Weafer stressed.

The capacity to strike key infrastructure inside Russia points to the growth of Ukraine's military strength and increasing pressure on Moscow.