All of Lukoil’s major refineries in Russia are now offline after a Ukrainian drone strike halted crude processing at its NORSI plant on 26 August, Reuters reported the shutdown. NORSI is Russia’s fourth-largest refinery and second-largest gasoline producer.

Ukraine’s General Staff said it had struck the refinery in Kstovo, Nizhny Novgorod Oblast, where a fire subsequently broke out. It said the refinery helps supply Russia’s armed forces.

Industry sources told Reuters that several processing units and other plant infrastructure had been damaged. No repair timetable is available, and Lukoil did not respond to the agency’s request for comment.

NORSI can process about 15 million tons of crude annually and produce about 5 million tons of gasoline and more than 5 million tons of diesel, according to Reuters.

A Reuters dispatch in The Moscow Times said Lukoil listed no NORSI-made gasoline, diesel, or other petroleum products for sale on the St. Petersburg International Mercantile Exchange after the shutdown.

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NORSI’s closure followed the complete shutdown of Lukoil’s Perm refinery after a 21 August drone strike. The company’s Volgograd plant had already stopped processing on 31 July.

The Moscow Times listed four previous occasions this year when drone strikes stopped NORSI from processing crude: 5 April, 20 May, 24 June, and 2 July. The latest attack, therefore, produced the plant’s fifth drone-related shutdown in less than five months.

Lukoil also operates a smaller refinery in Ukhta, which remains active.

Kremlin threatens retaliation

Nizhny Novgorod Oblast Governor Gleb Nikitin wrote that Russian forces had “repelled” more than 40 drones. He also reported damage to an unnamed industrial enterprise, several homes, and cars.

A day later, Kremlin spokesperson Dmitry Peskov promised a “harsh response” to Ukrainian strikes on Russia’s economic and trade infrastructure.

Russia is facing its second bout of fuel shortages this summer. Gasoline sales limits have returned to Moscow and St. Petersburg, while Rosneft has capped purchases at 30 liters per vehicle across its filling-station network, The Moscow Times reported.

Kommersant reported that Astrakhan Oblast had capped gasoline purchases at 30 liters and was serving drivers according to odd- and even-numbered license plates. Orenburg Oblast introduced a similar system and capped purchases at 30 liters to preserve supplies for emergency services and public transport, Governor Yevgeny Solntsev announced.

Five days before NORSI stopped, the Russian government ordered officials to distribute available fuel more evenly between and within regions. Russia also plans to extend its diesel export ban through September as refinery outages constrain domestic supplies.

Ukraine celebrated 35 years of independence on 24 August, and Ukrainian President Volodymyr Zelenskyy marked the day with an address listing what the invasion has cost Russia, published by the President's Office. He said Putin is mortal and out of time to understand Ukraine, and said Ukraine will not hand over Donbas or save the Kremlin half a million soldiers. He also asked partners for sanctions and weapons strong enough to force an end to the war.

Russia has been invading Ukraine since 2014 and fighting a full-scale war on it since 2022, and Ukraine now supplies a growing share of the missiles and drones it fights back with, while the air defense shielding its cities still hangs on decisions taken in Washington and European capitals—which is what makes a holiday speech a statement of what Kyiv will not trade and what it needs built or delivered next.

The losses he read back to Moscow

President Zelenskyy turned from his own citizens to Russia partway through the speech. 

"You wanted to take all our Ukraine, all our land; instead, you lost your oil refineries, your fleet, your profits, your entire generation that you sent into the meat grinder," he said. 

A country that wanted Ukraine erased from the map, he added, is now absent from the international agenda of the future civilization.

He set Moscow's self-image against its filling stations. 

"For 27 years, the head of Russia has talked about greatness, while Russia is standing in lines for gasoline," Zelenskyy said. 

Moscow and St. Petersburg brought back gasoline rationing this month, and Rosneft capped fills at every station in the country.

On the Russian leader he was blunt. 

"Putin hopes that we are tired. But we know that he is mortal," he said, adding that Putin never understood Ukraine and now will not have the time to.

A fifth Independence Day at war

Before the holiday, Russian ballistic missiles hit Kyiv and its main airport hub twice in 24 hours. A solution to Russian ballistic terror must be found, Zelenskyy said, and that gamble must not pay off. 

Russia does not want peace, it wants mobilization, the president said. Ukraine will not let Moscow seize the initiative or convince Europe that surrendering Donbas ends the war. Russia keeps pushing back the dates for taking all of Donetsk Oblast and will keep pushing them back, he said.

The president called Ukraine's defense industry a giant that forges independence around the clock, and demanded more from it. Mid-range strikes cut Russian logistics and long-range weapons cut Russian profits, he said, listing Moscow, Tuapse, Tula, Ryazan, Olenya, and Omsk among the places already hit. 

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Ukraine's home-built Flamingo cruise missiles should stop being a rare species and arrive en masse: "They must 'winter' in Russia," Zelenskyy noted. 

Previously, Flamingos have hit defense plants more than 1,000 km from the border, though they still appear in strikes in small numbers.

"China should no longer remain silent"

Ukraine is not asking anyone to fight for it, the president said — only for everything needed to stop the war before Putin starts the next one. He wants sanctions that make Russians howl and Moscow at a negotiating table, and said Washington has lost its illusions about Russian intentions. Europe must be Europe, he said: united, ambitious, brave. 

"China should no longer remain silent," he added, saying Beijing must cool the ardor of someone who puts on a sailor's uniform and cap and talks about a nuclear strike—a description that fits Putin.

Ukrainian forces struck production facilities at the Novokuybyshevsk oil refinery in Russia’s Samara Oblast overnight on 22 August, sparking a fire at the Rosneft-owned plant, Ukraine’s General Staff said. The extent of the damage remains under assessment.

Ukraine has repeatedly targeted Russia’s oil refineries to restrict military fuel supplies and reduce the energy revenues supporting Moscow’s war. The latest strike came as gasoline rationing returned to Moscow and St. Petersburg, and Rosneft capped nationwide purchases. Militarnyi described the plant as one of Russia’s 10 largest refineries.

The Rosneft-owned refinery can process about 8.8 million metric tons of crude annually and produces more than 20 petroleum products, including aviation fuel and diesel, Ukraine’s General Staff said.

Fire Point said FP-1 long-range drones were used to strike the refinery.

The same overnight wave also hit an Ozon logistics center in Chapayevsk, where people were injured, and work was halted, Reuters reported, citing the company.

Neither the damage to the refinery nor any interruption to production has been independently confirmed.

Ukraine keeps pressure on Russian fuel supplies

The strike came one day after Ukraine confirmed hitting Lukoil’s Perm refinery, approximately 1,530 kilometers from Ukraine’s northern border. That attack also caused a fire, according to the General Staff.

At least four Russian refineries went offline during August amid continuing Ukrainian attacks.

By mid-August, filling stations in at least 12 Russian regions were experiencing hours-long lines. Some areas had reintroduced purchase limits or rationing based on license-plate numbers, according to the same report.

Gasoline limits had also been reinstated in Moscow and St. Petersburg, while Rosneft had capped sales at 30 liters per vehicle across its nationwide filling-station network. Diesel purchases remained unrestricted.

Ukraine’s sustained drone strikes on Russian refineries have reversed the country’s position as a net fuel exporter. Moscow now imports gasoline from as far as India and Morocco while rushing crude oil through the Arctic to reach Asian buyers it can no longer supply with finished fuel. The flows are scaling up—and running on the same sanctioned, EU-listed tankers.

The reversal is tightening global fuel markets. Russia runs the world’s third-largest refining industry, and the combined disruptions have acted to squeeze supply worldwide, with Moscow banning exports of both gasoline and diesel to keep its own pumps supplied.

Russian refining falls to its lowest since 2002

Ukrainian drone strikes have driven Russian crude processing to 3.6 million barrels a day in July—its lowest level since 2002 and roughly a third below the seasonal norm, according to EA Analytics data cited by Bloomberg.

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Ukraine hit at least 24 of Russia’s 34 largest refineries in some 50 strikes, with five more struck last week and at least two this week. With refining at a 24-year low, Russia is exporting crude through the Arctic while importing refined fuel from India.

Fuel shortages and rationing now affect about 50 million people—a third of Russia’s population. Moscow is subsidizing both the damaged refineries and the imported fuel replacing their output.

Sanctioned tankers take crude toward the North Pole

Seven tankers carrying about six million barrels of crude were heading to Asia through the Northern Sea Route as of 11 August. That volume already amounts to nearly half the approximately 13 million barrels the route carried during the entire 2025 season.

The route cuts two weeks off the voyage to China compared with the Suez Canal, and ice conditions are relatively mild this year, one trader told Reuters.

But speed is only part of the surge. Tankers on the Arctic route bypass European waters, where enforcement has led to inspections and detentions of sanctioned vessels, and Ukraine’s strikes on Black Sea shipping and the Iran–US standoff at Hormuz have narrowed the alternatives.

Vessel-tracking data show the convoy following a route north of the Severnaya Zemlya archipelago rather than through the traditional and more southern Vilkitsky Strait—putting sanctioned oil tankers within 500 nautical miles of the North Pole. Maritime experts said commercial traffic at this scale has never operated that far north.

Russian crude returns home as Indian gasoline

In the opposite direction, gasoline refined from Russian crude at Nayara Energy’s Vadinar refinery in western India is flowing back to Russia through a chain of ship-to-ship handoffs at Egypt’s Damietta Port. At least three cargoes have cycled through the hub since June. The first reached Russia on 5 August.

Bloomberg’s tracking data show the tanker Cyclone loaded 42,000 tons of gasoline at Vadinar on 18 June, transferred the cargo to the Oman-flagged Garnet off Damietta on 6 July, and the Garnet reached Russia in early August. Two more tankers, Varg and Photon, followed the same route in July, with Photon’s cargo handed to the Russian-flagged Talisman on 28–29 July.

All these vessels are under EU sanctions. Garnet and Talisman are also under US sanctions.

Nayara’s refinery, which processes 400,000 barrels a day, is 49% owned by Rosneft. EU sanctions in July 2025 drove away its non-Russian crude suppliers, so the plant switched to processing only Russian oil and now buys and sells through traders—which is how its gasoline reaches Russia without a direct India-to-Russia sale, as Euromaidan Press reported.

The expected September launch of Rosneft’s Vostok Oil project could push more crude through the Northern Sea Route, traders told Reuters. NSR crude shipments fell 4% in 2025. This year’s opening weeks have already matched half the full-season total.

Russia can’t refine its way out of its fuel crisis, so it is changing who controls the already existing fuel. Months of Ukrainian drone strikes on refineries have driven shortages and rationing across much of the country. The government’s answer isn’t more fuel—it is a different market.

Faced with the shortage, the Kremlin had options. In June, analysts urged it to raise the exchange quota to push more fuel onto the open market and toward the regions running dry.

It did the opposite. The mandatory share of gasoline that producers must sell on the open exchange was cut from 15% to 10%, with the majors pushing for 2%, and the exchange was closed to anyone but buyers who will use the fuel themselves, shutting out traders who bought to resell.

That choice adds no fuel. It moves distribution off the exchange that set prices for a decade and into direct contracts between the big producers and the buyers they pick—handing the majors the chain from refinery to pump. Part of the package came straight from proposals Rosneft head Igor Sechin sent to President Vladimir Putin.

Winners and losers

The winners are the big, vertically integrated oil companies, which refine up to three-quarters of Russia’s oil. Direct deals let them keep the margin that once went to middlemen and choose who gets supplied; drop the quota to 2%, and about 5 million tonnes of gasoline a year move into their private channels.

The losers are the independent stations—60% to 72% of Russia’s roughly 25,000 gas stations, depending on who’s counting, and now unable to buy at the exchange price.

Alexander Moiseev, who owns the Kostroma Fuel Company, has been hauling gasoline from Surgut, 2,000 kilometers away, at 118 rubles a liter ($1.45) with freight, because the majors won’t sell to him wholesale. He works on a minimal markup. Rosneft, meanwhile, has multiplied sales at its own pumps.

What stabilization there is has been narrow. Prices eased mainly where supply was steered—Moscow, St. Petersburg, the big cities—while regions thick with independent gas stations stayed short, independent analyst Kirill Rodionov told Kommersant.

None of this is hidden. Facing the crunch, the government also let refiners sell banned Euro-2 gasoline again; online marketplaces pulled fuel listings; and Deputy Prime Minister Alexander Novak called the market “challenging but under control.”

In occupied Crimea it goes furthest: this week, the occupation authorities announced fuel sales were stabilizing, even as they capped each car at 20 liters and fixed the price of AI-92, the Crimean Tatar Resource Center reported.

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The market goes dark

As the exchange shrinks, its prices no longer reflect the market, and the state publishes less information on output, stocks, and regional supply. The people who most need to see where Russia’s fuel balance is breaking—regulators at home, and the sanctions monitors and energy analysts abroad who read that data—are left with less to look at, market participants told Kommersant. The market is going dark.

Whether the change sticks is contested. Some read the cuts as a passing emergency. Others expect the market to keep sliding toward closed, bilateral deals—less transparent, harder for newcomers, the independent stations ever more tied to the majors, Viktoria Trifonova, Senior Analyst at Yakov & Partners, told Kommersant. The state has reached for limits, subsidies, and hands-on redistribution ever since the 2018 price crisis.

Keeping the independent gas station chains alive was never the goal, NEFT Research’s Dmitry Prokofiev wrote in Kommersant—it was to keep fuel flowing to the big cities of European Russia and, above all, to the priority government sector.

Occupation officials in Sevastopol and occupied Crimea are telling residents the fuel crisis is easing—and this week they resumed “free sale” at a handful of named stations. From 6 August, every grade would again be sold openly on the TES network, occupation governor Mikhail Razvozhaev said, and AI-92, he noted, has been cut and fixed at no more than 100 rubles per liter ($1.23).

The catch is in the same announcement: no more than 20 liters per car, volumes the governor himself called small, and—at ATAN’s seven stations the same day—no filling canisters.

In occupied Crimea, the ATAN network capped diesel at 30 liters per customer and charged 119 rubles per liter ($1.46), the Crimean Tatar Resource Center reported.

Occupation authorities blame logistics and promise the caps will loosen and prices will fall once supply stabilizes. But shortages, high prices, and rationing show that the peninsula’s supply problems are far from solved, the center said. Crimea is caught in a shortage that now stretches across Russia, from filling stations to farms.

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None of this is new. Sevastopol restricted fuel sales on 22 May, Crimea on 29 May, and for weeks drivers have been buying by QR code. Through the summer, Ukraine’s drone campaign has been draining the seaborne lifeline that feeds the peninsula. The worsening supply of fuel, power, and water is a natural consequence of the war and the occupation, Ukraine’s military intelligence said.

Ukrainian drone strikes have forced Russia to import gasoline—shipping cargoes from as far as Morocco to an Arctic port—and to pay for the damage twice over. Moscow now subsidizes both the refineries the drones keep setting on fire and the foreign fuel replacing what those refineries can no longer produce.

Russia caps fuel prices at home below what refiners could earn abroad, and the budget pays them the difference—so they keep supplying the domestic market rather than exporting everything. The payments, together with related reimbursements, reached 1.221 trillion rubles ($15 billion) from April through July, Finance Ministry data show—close to the full annual budget of Moscow Oblast, the region ringing the capital.

Those monthly payments have roughly halved since spring, to about 190 billion rubles ($2.4 billion) in July, as lower oil prices narrowed the gap the subsidy fills.

Russia cannot keep its refineries running

Russian crude processing fell to 3.6 million barrels a day in July, its lowest since 2002 and roughly a third below the seasonal norm. Ukraine has hit at least 24 of Russia’s 34 largest refineries in some 50 strikes.

Fuel shortages and rationing now affect 50 million people—about a third of Russia’s population—according to a Financial Times analysis. Russia runs the world’s third-largest oil-refining industry, so the lost output has tightened diesel and gasoline supply beyond its borders. With less capacity to refine at home, Russia has had to export more raw crude and less high-value fuel.

With its refineries down, Moscow is now paying a second subsidy—this time to the importers bringing gasoline in. Gasoline is arriving by rail from Belarus and Kazakhstan and by sea from India and, in mid-July, Morocco: a cargo loaded at the port of Tangier and discharged at Murmansk, on the Arctic coast.

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Ukraine has already named the import route as a target. In early July, presidential sanctions commissioner Vladyslav Vlasiuk called Russia’s new reliance on imported fuel a fresh vulnerability and said Kyiv had raised a response with the European Commission—though the EU’s next sanctions package, now in preparation, is so far built mainly around other measures.

A country that ships crude out of the Arctic is now shipping gasoline in through it.

Ukrainian drones struck one of Russia's five largest oil refineries in Yaroslavl on the morning of 6 August, setting off several fires across the site, monitoring channels reported. Open-source analysts placed the blazes on the refinery grounds, while the region's governor claimed his air defenses downed the entire raid. The strike continued a months-long campaign that has pushed Russian oil refining to its lowest level in more than two decades.

Fires break out across the refinery

Ukrainian monitoring Telegram channel Exilenova+ first reported the attack around 4:00, later sharing footage that showed thick black smoke rising from several points on the site. Fire Point, the Ukrainian company that builds the FP-1 long-range drone, said Ukraine's Defense Forces hit the plant with the domestically made FP-1s. Open-source analysts geolocated one blaze to the refinery grounds. Astra, a Russian news Telegram channel, reported one fire on the plant's territory and a second it had not yet located.

One of Russia's biggest refineries

Slavneft-YANOS, also called the Novo-Yaroslavl refinery, ranks among Russia's five largest and is the biggest in the country's central regions. It processes about 15 million tonnes of crude a year into gasoline, diesel, aviation kerosene, jet fuel, lubricants, and bitumen. Rosneft and Gazprom jointly control 99.7% of its parent company, Slavneft. The plant's fuel feeds central Russian industry, airports, the Northern Railway, and military sites. It sits more than 700 kilometers from Ukraine's border.

Russia claims it downed every drone in the region

Yaroslavl Governor Mikhail Yevraev first reported the region was under drone attack around 3:00 and closed the highway toward Moscow. He later claimed the region had repelled its most massive drone raid, downing all 88 drones with no casualties. Yevraev stated that a detached house burned, windows were shattered in several apartment blocks, and residents' cars were damaged. 

Russia's Defense Ministry claimed it destroyed 605 drones over several regions overnight.

The plant has burned repeatedly in 2026, catching fire on 28 March, 26 April, 8 and 22 May, and 6 and 16 July before the latest hit. That made 6 August the seventh strike on the refinery this year. In the 16 July attack, an FP-1 struck the plant's tank farm.

Russia's refining in retreat

Ukraine has sharply expanded its FP-1 deep strikes on refineries this year, knocking out around 26 plants. By late July, only eight had fully restarted and at least 11 partly. Seven refineries stayed idle. Russian refining fell to 3.6 million barrels a day, its lowest since May 2002. 

Earlier, Moscow banned fuel exports, boosted gasoline imports from Belarus 25-fold, and turned to India and Morocco. It also let refiners sell Euro-2 gasoline, a grade banned in Russia since 2013, through 1 July 2027.