Ukraine’s gloves are off in its energy war with Russia. How much can it increase the pressure?

By Clare Sebastian, Vasco Cotovio, CNN

(CNN) — Ukraine said Thursday its long-range drones had struck a major offshore oil platform in the Caspian Sea this week, in a previously undisclosed mission that signals a new expansion of its target list in a mounting campaign to cut off the Russian energy revenues funding its war.

“This is Ukraine’s first strike on Russian infrastructure related to oil production in the Caspian Sea,” a source with the Security Service of Ukraine told CNN, calling it “another reminder to Russia that all its enterprises working for the war are legitimate targets.” The Filanovsky oil platform, owned by Lukoil, claims to be the largest oil field in the Russian sector of the Caspian. CNN has reached out to Lukoil and the Russian Ministry of Defense for comment.

Ukraine’s deep strike campaign against Russian energy facilities began in earnest in early 2024, but since the beginning of August, Kyiv has escalated this effort, doubling down on what Ukraine’s sanctions commissioner Vladyslav Vlasiuk calls “long-range sanctions” targeting Russia’s biggest financial lifeline. Ukraine is now hitting an increasingly broad range of targets including not just refineries but oil and gas export infrastructure, pipelines, tankers, and now offshore drilling infrastructure.

November saw the highest number of attacks yet in a single month, according to data from the Armed Conflict Location & Event Data (ACLED) project, and CNN’s analysis.

It comes at a critical juncture in the war. Recent US-led peace efforts only appear to have hardened Russia’s maximalist demands, and Moscow’s forces are creeping forward in several areas of the front line. That, along with a global oil supply glut cushioning the market against potential price rises, means Ukraine’s Western allies have grown increasingly supportive of this campaign.

“I think the general strategy since summer is the idea that you cannot allow Russia to retain so much of its critical energy revenue that has been fuelling the massive manpower recruitment advantage that Moscow has over Ukraine,” said Helima Croft, global head of commodity strategy at RBC Capital Markets, referring to Russia’s ability to pay high salaries and sign-on bonuses to recruit soldiers.

“So, I do think it’s a more systematic effort to sort of close that energy ATM.”

Repeated attacks, bigger targets

Between the beginning of August and the end of November, Ukraine struck at least 77 Russian energy facilities, almost twice the total for the first seven months of the year, according to the ACLED. In November at least 14 refinery hits and four attacks on Russian export terminals were recorded.

Striking the same facilities multiple times is now a key part of the strategy. The Rosneft-owned Saratov refinery, for example, has been hit at least eight times since the beginning of August, with four of those strikes in November.

“What used to be occasional strikes meant to cause damage has become a sustained effort to keep refineries from ever fully stabilising,” wrote Nikhil Dubey, senior refining analyst at data and analytics firm Kpler, in early December.

Dubey’s research shows that repeated strikes on Russian refineries like Saratov have knocked a significant amount of capacity offline and are “slowing the pace of every repair.” He also assesses that since August, Kyiv has been trying to maximize the impact of its refinery strikes, by targeting not just “the visible parts of the refinery but the important clogs in the refining system that produce the final fuels.”

Sergey Vakulenko, a senior fellow at the Berlin-based Carnegie Russia Eurasia Center think tank, who spent 25 years in the Russian oil and gas industry, told CNN he believes the up- front damage Ukraine has inflicted has been manageable for Moscow so far, but that does not account for the long-term damage from the large-scale fires these attacks tend to cause.

“Metals are not particularly fond of that kind of treatment, and nobody really knows how many of these cycles of heating by fire and cooling down these columns could survive,” he told CNN.

The pattern of attacks also suggests Ukraine is no longer trying to limit the impact to just Russia’s domestic energy market. Since August, it has markedly increased strikes on Russian oil export facilities.

The ports of Novorossiysk and Tuapse on the Black Sea and Ust-Luga on the Baltic have each been hit several times. And pipelines are also in play. The Druzhba pipeline carrying Russian oil to the few remaining EU countries that rely on it has now been hit five times since August, triggering protests from Hungary, which remains on good terms with Moscow.

In late November, the Caspian Pipeline Consortium, which ferries 80% of all Kazakh oil supplies from Kazakhstan to the Black Sea, said it had been attacked twice in four days.

The pipeline company, jointly owned by Russia, Kazakhstan and international oil companies including Exxon (XOM), Chevron (CVX) and Eni, said the second strike had knocked out one of its three mooring points for tankers. Ukraine never officially claimed responsibility for the strike.

The entire terminal shut down for two days, according to Homayoun Falakshahi, head of crude oil analysis at Kpler. The Kazakh foreign minister called it “an action harming the bilateral relations of the Republic of Kazakhstan and Ukraine.”

Vakulenko believes this shows the risks of this expanding campaign. “I guess Ukraine wants to instil fear and wants to make it expensive for any oil tankers going into the Black Sea,” he said, but added: “I think with this, Ukraine doesn’t earn any sympathies and might incur some costs.”

Ukraine is undeterred. On Wednesday it carried out its third attack on another critical link in Russia’s oil supply chain – the ships that carry it to global markets. A source in Ukraine’s security service claimed sea drones had been used to attack a sanctioned oil tanker in the Black Sea, heading for Novorossiysk.

The first two attacks on tankers in late November triggered a rare response from Putin, who called it “piracy,” and Turkey summoned both Ukrainian and Russian ambassadors in protest.

“We have no other tool than to cut money flow to Russia to prevent this war for existence,” said Oleksandr Kharchenko, director of the Energy Industry Research Centre in Kyiv. The fact these sanctioned vessels were there in the first place, he argued, clearly demonstrates Western sanctions are inadequate. “So guys, if you can’t deliver your sanctions, maybe someone (can) help you,” he said.

Western support

Two external factors have allowed Ukraine to ramp up its energy attacks in recent months. First, a dramatic about-turn by the United States.

“It is very hard, if not impossible, to win a war without attacking an invader’s country,” wrote US President Trump on Truth Social in late August. In October, two sources told CNN the US had increased intelligence sharing with Ukraine after the abortive Alaska summit between Trump and Putin, with a focus on energy-related targets inside Russia, hoping to force Russia back to the negotiating table.

Europe was also on board. “By the end of summer no one in the room would even mention that Ukraine should restrain from hitting any target,” noted Dovilė Šakalienė, a Lithuanian parliamentarian who served as the country’s defense minister until October this year, in written comments to CNN. “Growing realization in the minds of Europeans that failure of Ukraine will directly affect our security within the span of one standard parliamentary term also helped,” she added.

“The US remains an active partner when it comes to Ukraine’s deep strikes on Russian energy targets, while European allies have stepped up their involvement,” a source with Ukraine’s drone program told CNN.

The second big tailwind for Ukraine has been falling oil prices driven by a global oversupply.

Croft, from RBC Capital Markets, said she “just couldn’t envision that the Trump administration, which has been so focused on lower retail gasoline prices” would be “so supportive” of Ukraine’s attacks on Russian energy if oil prices were high.

A Western intelligence source told CNN that Ukraine is getting extra support in this campaign “as needed” and “the goal is for these attacks to have consequences.” The global oil markets can “take it,” the source added.

How long can Russia withstand this?

While Russia remains intransigent in peace talks, its oil sector – the single biggest financial pillar of its war – is looking much shakier than a year ago.

Russia’s oil refineries are processing about 6% less oil than they were this time last year, according to Kpler analyst Dubey. While that number may look small, it is disruptive for the Russians because “they usually run with only a small gasoline surplus,” Dubey said.

In September and October this year, videos of cars lining up outside gas stations surfaced online and Russia’s government, facing shortages in some regions, moved to ban gasoline exports until the end of the year. At the end of November, Putin signed a law allowing Russian companies to receive a subsidy if they refine oil at Belarusian refineries and then import it back to Russia, state media reported, a measure designed to stabilize the domestic market.

Ukraine’s escalating attacks have also coincided with the first new sanctions imposed on Russia since Trump returned to office in January. In October, Trump announced full blocking sanctions on Russia’s biggest oil companies – Rosneft and Lukoil.

Prices for Russian Urals crude have gradually fallen since then to around their lowest point in the war so far, according to data from Argus Media, helping fuel a drop in Russian oil export revenues to their lowest point since February 2022, according to the International Energy Agency. In November, state media reported Russia’s oil and natural gas revenues fell almost 34% compared with the same month last year.

Vakulenko believes the attacks on Russian energy facilities are just “one of the elements of the puzzle” of how to pressure Putin to seek peace.

“I think the amount of economic damage one has to inflict on Russia is probably more than Ukraine could create at the moment,” he said. “I believe that if push comes to shove, Russia could probably survive with half of its oil and gas exports.”

For Croft, it’s a question of whether Ukraine and its allies can stay the course.

“The combination of infrastructure attacks focused on export targets, and the staying power of blocking sanctions, I think that could potentially drive Russia back to the table, but it has to be a longer duration event,” she said.

With Trump now pressuring Ukraine to accept concessions, this may be a test of his appetite to do both.

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CNN’s Saskya Vandoorne, Victoria Butenko, Lou Robinson and Anna Chernova contributed to this report