Ukrainian drones struck one of Russia’s largest oil refineries on Sunday, igniting another oil price rally. The drones hit Russia’s Kirishi refinery in northwestern Leningrad region, intensifying weeks of Ukrainian attacks on Russian energy infrastructure. Operated by Surgutneftegas, the giant refinery has a capacity to process 17.7 million metric tons of crude per year (355,000 barrels per day), making it one of Russia’s three largest refineries by output. Previously, U.S. President Donald Trump said he was ready to impose fresh sanctions on Russia if Western nations stopped buying Russian oil. Brent crude for October delivery was trading up 0.4% to $67.29 per barrel AT 12.30 pm ET on Monday, while the comparable contract for WTI crude gained 0.7% to trade at $63.15 per barrel.
"The attack suggests a growing willingness to disrupt international oil markets, which has the potential to add upside pressure on oil prices," JPMorgan analyst Natasha Kaneva told Reuters.
A wave of strikes in recent weeks has hit major refining sites in the Volga and southern regions. Fires and unplanned outages at Ryazan, Syzran, and Novoshakhtinsk have underscored how exposed Russia’s downstream sector has become to low-cost, long-range systems designed to bypass layered air defenses.
Ukraine has been using a conventional long-range strike arsenal from its western allies on Russian energy infrastructure over the past two years. The country has been relying heavily on Storm Shadow missiles by the United Kingdom and SCALP-EG missiles by France to maintain long-range strike capability. However, Ukraine quickly realized that relying too heavily on its western allies was not sustainable in the long-run, partly because Europe failed to restart missile production at scale while American missiles came with strict targeting restrictions.
Kyiv has been rapidly beefing up its long-range strike program, and has managed to develop a fairly robust supply chain of long-range drones such as the AQ-400 Scythe, AN-196 Liutyi and FP-1, complemented by a range of mini-cruise missiles across multiple production lines. Unlike long-range drones, Ukraine’s mini-cruise missiles offer greater speed and payload capacity. Last year, Ukrainian President Volodymyr Zelenskyy announced that his government would supply the country’s armed forces with 30,000 long-range and deep-strike weapons in 2025.
Ukraine, however, still lacked a home-grown heavy hitter missile that combines long range with high speed and high payload capacity. Whereas Ukraine’s long-range mini-cruise missiles and drones are capable of reaching deep into Russian territory, they can only carry small payloads in the 10 to 100 kilograms (22lbs-220lbs) range. Moreover, they are slow, making them easier to intercept and have low kinetic energy, thus making their impact less lethal. However, that changed in August after Ukraine unveiled the FP-5 Flamingo, a heavy cruise missile capable of carrying a 1,150-kilogram payload and traveling 3,000km (almost 1,900 miles).
Fire Point, maker of the Flamingo, currently has the capacity to produce 30 missiles per month, but says it can scale that up to more than 2,500 per year with the necessary funding. Flamingo emphasizes affordability through a simple design, using commercial off-the-shelf and repurposed components, such as the Ivchenko AI-25TL engine. While its large size and lack of stealth are drawbacks, the missile's potential to hit targets across European Russia could be a game-changer in the Russo-Ukrainian War. Serial production has already begun, with President Zelenskyy calling it "the best missile" in the army's arsenal. Ukraine is also developing the Korshun land-attack cruise missile and Hrim-2 short/medium-range ballistic missile to complement the Flamingo.
However, only time will tell whether Flamingo will be a real game changer in a war that has lasted three and a half years, and how much real pressure Ukraine’s latest raids can apply. After all, Russia’s refining system runs close to 5.5 million barrels per day of crude, with surplus capacity and the ability to reroute product through unaffected plants. Damage assessments show many of the disrupted facilities returning to partial operation within days, blunting the market impact. Further, sustained attrition of large complexes requires either higher strike volumes or more advanced munitions. That leaves the effectiveness of the campaign pegged to whether Kyiv can quickly scale production, maintain the tempo, and target chokepoints–rather than just tallying fires on the refinery map.
To compound matters, early test results of the Flamingo have been mixed. A couple of weeks ago, Ukraine launched three Flamingo missiles against North Crimea in a relatively undefended region, with only two arriving on the target. One missile missed the target by 100-200 meters, while the other landed about 15-40 meters from its aimpoint but still managed to cause significant damage. Further, the Flamingo is priced between $500,000 and $1,000,000 per unit, or 10-20 times more expensive than the long-range drones Ukraine has been deploying. This means that Ukraine will continue to rely on its allies for financing if it’s to successfully develop its domestic heavy missile program.
By Alex Kimani for Oilprice.com
