Collapsing Russian oil industry delivering windfall profits to Western oil majors

Ukraine’s precision strikes on Russia’s oil infrastructure — combined with tightening Western sanctions — are crippling the Kremlin’s energy sector and unexpectedly enriching Western oil companies.

Since mid-2025, Ukrainian drones have hit nearly 160 oil extraction and refining facilities across Russia, including key refineries and export terminals.

Each strike has deepened the supply crunch inside Russia and reduced its ability to export fuel. As a result, tanker shipments of Russian oil products dropped to around 2 million barrels per day in September — the lowest level since the full-scale invasion began.

The collapse of Russia’s refining capacity has sent global refining margins soaring. The four largest Western oil majors — ExxonMobil, Chevron, BP, and Shell — recorded a 61% jump in refining profits in the third quarter compared to the previous one. ExxonMobil alone saw a 30% increase in its energy-products division, reaching $1.84 billion.

The profit surge stems from a mix of military, political, and market forces. Ukrainian strikes have taken millions of barrels of Russian capacity offline, while Western sanctions have made it harder for Moscow to redirect exports. Analysts estimate Russia’s oil-product exports fell by about 500,000 barrels per day, according to Kpler data. Additional sanctions — including U.S. freezes on Rosneft and Lukoil assets and the EU’s ban on petroleum products made from Russian crude — have tightened the noose further. Meanwhile, Chinese refiners, wary of secondary sanctions, have begun scaling back Russian purchases.

For Ukraine, these attacks do more than damage the enemy’s war economy; they also reshape global energy flows in ways that strengthen Kyiv’s allies. Each successful strike on a refinery, storage terminal, or pipeline node undermines Russia’s fiscal ability to fund its war — while giving Western refiners a larger share of the shrinking global supply.

The outcome is paradoxical: as Russia’s energy empire unravels, Western oil giants are posting some of their strongest refining margins in years. The energy war has become a zero-sum game, and Ukraine’s growing campaign against Russian oil infrastructure is redrawing the map of global profit and power.