Key Points and Summary – Russia’s war effort and economic stability are increasingly threatened by pressure on its oil lifeline.
-Falling revenues, exacerbated by Western sanctions targeting its oil companies and “shadow fleet,” are creating significant budget deficits.
Putin in 2025 Looking Stern. Image Credit: Creative Commons.
-Simultaneously, Ukraine’s relentless drone strikes, now aided by U.S. intelligence, have crippled up to 38% of Russia’s refining capacity.
-This mirrors the Allied strategy against Axis oil infrastructure in WWII. Facing a potential “Hobbesian choice” between funding the war and maintaining domestic stability, Putin’s regime is showing signs of strain as the Russian military machine risks being slowly starved of its crucial fuel.
Russia’s War in Ukraine: Hit Moscow’s Oil to Get Putin to Stop?
WARSAW, POLAND – In the final phases of the Second World War, one of the critical items that empowered the US and its allies due to its availability but hobbled the efforts of its Axis adversaries by its scarcity was petrol.
A primary reason the famous German gamble to stave off defeat in the war, the Battle of the Bulge, ended in defeat was that the German military simply ran out of the fuel it needed to keep its tanks operational.
During the war, the US supplied approximately 85 percent of the oil and petrol for the Allied war effort in WWII, which included both crude oil and refined products.
The US had its own domestic production, but it also refined and supplied enormous amounts of petroleum products to other Allied nations.
The volume that the US provided exceeded the output of other countries and was crucial to the war effort.
As the war in Ukraine approaches four years in duration, the issue of petroleum supplies is becoming a larger issue every day for Russia’s war machine.
T-90 Tank. Image Credit: Creative Commons.
This is for two fundamental reasons.
One is that Russian President Vladimir Putin depends on oil revenues for much of what keeps both his military visiting destruction on Ukraine every day, as well as what allows the Russian economy to keep creaking along.
As more than one Ukrainian defense specialist speaking to National Security Journal has said: “[A]s long as Putin is able to export oil the war will not come to an end. Whether people are not living decent lives and cannot purchase petrol to go about their daily lives or if there are no school buses running in -25C weather will never be an issue for the Kremlin. They only care about having enough money coming in to keep military factories operating at peak capacity.”
The Most Effective Sanctions
Four days ago, the UK fired a series of volleys at Putin’s oil lifeline.
As the BBC reported, “Britain is targeting Russia’s largest oil companies and the country’s ‘shadow fleet’ of oil tankers in a bid to cut off Vladimir Putin’s ability to fund the war in Ukraine. The UK government is also pursuing a major Indian oil refinery and four Chinese oil terminals as part of a package of 90 new sanctions. Chancellor Rachel Reeves said the move was expected to have a significant impact on Russia’s economy and its ability to sustain military operations in Ukraine.”
Legal sanctions are one matter, but Ukraine’s President Volodymyr Zelensky has said in the past weeks that his military’s attacks on Russia’s oil infrastructure are “the most effective sanctions.” While at the same time His Majesty’s Government is turning up the pressure to choke off the money flows from Putin’s oil exports, Washington plans to share additional intelligence with Ukraine to allow the nation to conduct more accurate attacks on Russian refineries, pipelines, and other energy infrastructure.
The most significant impact of these “sanctions” is the financial implications for Vladimir Putin.
It is not only his military that relies heavily on oil to keep running. The ruling circles around him only function thanks to a multilayered network of corruption and patronage, with oil and gas being the primary funding stream for both.
Part of the Ukrainian strategy is to disrupt that cash flow that oil creates for Putin.
As Russian refining capacity declines, the former KGB lieutenant colonel will be forced to make the proverbial Hobbesian choice.
That is either continuing to sustain the Russian war or maintain the payouts to oligarchs and citizens that secure the political support he needs to survive and keep his hold on power.
But what is becoming clearer is that these attacks on Russian oil can eventually grind the Russian Army to a halt.
However, it is not just the reduction in supplies caused by Ukraine’s military attacks on refineries, pumping stations, and port facilities.
Other Pressures
As a recent article in the journal Foreign Affairs reads:
“Russia’s fiscal indicators are flashing red. Oil and gas revenues are declining because of lower prices, rising logistical costs, volatile exchange rates, and the threat of expanded sanctions. In the first half of 2025, federal revenues contracted by 16.9 percent. The Finance Ministry designed its 2026 budget around an assumed oil price of $59 per barrel, down from $67 in the previous draft budget, and will likely revise the estimated price even lower.”
After World War II, the US commissioned a series of studies to evaluate the effectiveness of its strategies aimed at crippling the economies of its enemies.
US Strategic Bombing Surveys of the European and Pacific theaters revealed the significant impact of strikes on oil, logistics, and power infrastructure.
Blockades and strategic bombing of German oil refineries is what saw Hitler’s Wehrmacht beset with fuel shortages by 1945, and without the primary mechanical inputs it needed to manufacture munitions.
In the Pacific, submarine warfare and mining of trade routes deprived Japan of fuel by the end of the war. Attacks on rail, road, and sea-based logistics prevented Germany and Japan from resupplying their forces and sustaining their industries.
The parallels today with Ukraine’s relentless program of striking Russian oil and logistics networks with drones and sabotage are easy to see.
Between 25 percent and 38 percent of Russian oil-refining capacity has been either destroyed or severely damaged, and this percentage is increasing by the day.
The consequences for Russia are only going to increase.
Putin will be forced to disappoint either his defense industrialists or the oligarchs he depends on to retain his position.
As the RAND Corporation analyst Michael Bohnert writes in an op-ed on this subject recently: “Without reliable resupplies, the Russian military will become less mobile and create opportunities for incremental Ukrainian victories. The Russian bear is slowly being starved.”
About the Author: Reuben F. Johnson
Reuben F. Johnson has thirty-six years of experience analyzing and reporting on foreign weapons systems, defense technologies, and international arms export policy. Johnson is the Director of the Asia Research Centre at the Casimir Pulaski Foundation. He is also a survivor of the Russian invasion of Ukraine in February 2022. He worked for years in the American defense industry as a foreign technology analyst and later as a consultant for the U.S. Department of Defense, the Departments of the Navy and Air Force, and the governments of the United Kingdom and Australia. In 2022-2023, he won two awards in a row for his defense reporting. He holds a bachelor’s degree from DePauw University and a master’s degree from Miami University in Ohio, specializing in Soviet and Russian studies. He lives in Warsaw.
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