Russia’s Volgograd oil refinery suspended oil processing on Wednesday after a Ukrainian drone attack triggered a fire at the plant. The Lukoil-owned refinery is a major Russian oil processing facility in Volgograd City in southern Russia. The refinery has been operating since 1957 with a capacity of ~300,000 bpd (14.5 million tons/year), and processed an estimated 13.5–13.7 million metric tons of oil in 2024.
The facility produces gasoline, diesel, kerosene, and lubricants, with recent modernizations focused on increasing efficiency and output of high-viscosity oils. The refinery achieved Euro-5 standard production in 2016, but has been repeatedly targeted by Ukrainian drones during the ongoing war in Ukraine, with at least 3 major fires and disruptions reported since 2024.
The latest attacks mark a return of Ukrainian strikes on Russian energy infrastructure, which had somewhat subsided in January amid peace talks between the two countries. Unfortunately, the peace negotiations held in Abu Dhabi and mediated by the U.S., have concluded without a major breakthrough, though they resulted in an exchange of more than 300 prisoners. The primary point of contention has been territorial, with Moscow demanding control over areas in eastern Ukraine, which Kyiv opposes.
Yevgeny Borovikov, an executive at insurance broker Mains, recently told Russian daily Kommersant that Ukrainian strikes on Russian energy infrastructure, particularly oil refineries, cost the Russian oil and gas sector over 1 trillion rubles ($13 billion) in 2025 alone.
Last year, nearly 40% of Russia’s oil refining capacity was forced offline at various points, with roughly 70% of these shutdowns linked to drone strikes by Ukraine. The targeted strikes, which hit critical infrastructure a total of 371 times in 2025, have forced Russia to divert production and pay to stabilize the sector, according to reports from UNITED24 Media and The Moscow Times. Key targets included oil refineries (81 attacks), maritime infrastructure (27), and pipelines (8), causing massive, recurring, and expensive damage. The strikes have resulted in increased domestic fuel prices, with some regions facing fuel shortages and power grid damage.
By Alex Kimani for Oilprice.com