Ukraine's Refinery Strikes Push Russia to Seek Overseas Fuel Processing

Russia is increasingly looking beyond its borders for help processing crude oil as Ukrainian drone attacks cripple refineries and deepen a growing fuel shortage across the country.

Kyiv has targeted dozens of Russian oil-processing facilities with drone strikes in recent months, aiming to weaken Moscow's ability to generate revenue and maintain the resources needed for its four-year full-scale war against Ukraine.

The attacks have contributed to worsening shortages of gasoline and diesel, prompting Russia to restrict fuel exports and introduce measures designed to protect domestic supplies.

Moscow has now reached an agreement with Kazakhstan's privately owned Kondensat refinery to process Russian crude and produce additional fuel for the Russian market.

However, energy analysts say the arrangement is unlikely to make a significant dent in Russia's shortage.

Russia, with a population of about 143 million, can consume as much as 120,000 metric tons of gasoline every day during the summer driving season. By comparison, Kondensat has the capacity to produce only around 200,000 metric tons of gasoline annually.

That means the Kazakh refinery could cover only about 0.3 percent of Russia's daily gasoline requirements.

John Roberts, a nonresident senior fellow at the Atlantic Council, said that while Kondensat could make only a marginal contribution, Russia's desperate circumstances meant even relatively small amounts of additional fuel could be valuable.

"The shortage that they have of fuel, of gasoline and diesel, is acute," Roberts said. "It helps, but it doesn't solve the problem."

He said the additional supplies could be particularly important for Russia's military, which is also feeling the effects of tightening fuel availability.

Kondensat's Previous Russian Connections

Kondensat has longstanding links to Russian energy interests and has operated significantly below its potential capacity for years.

Corporate records have connected the refinery to Tatneft, one of Russia's largest oil companies, through Osprey Investment. Osprey holds an interest in Birinshi Shina Kompaniyasy, Kondensat's principal shareholder, and previously shared ownership of Mining Development Company with Turkish fuel distributor Aytemiz.

Tatneft acquired Aytemiz in 2023.

The relationship with Russian crude became more direct in 2024, when Kondensat began processing oil supplied by Tatneft through its TANECO refinery in Russia's Tatarstan region.

That year, Kazakhstan and Russia also agreed to allow the Kazakh facility to export gasoline produced from Russian crude back into Russia. The arrangement was renewed in 2025.

Tatneft's corporate relationships subsequently changed after Britain imposed sanctions on the company in 2025. Tatneft transferred its entire interest in Aytemiz to TNCI Holding, an investment company controlled by the government of Tatarstan.

The transaction removed Tatneft's direct ownership connection to Aytemiz and, consequently, weakened the visible corporate link between Tatneft and Kondensat through Osprey.

Russia Looks Toward Central Asia

With Ukrainian attacks continuing to disrupt Russia's refining capacity, analysts expect Moscow to explore additional processing options in Central Asia.

Russia retains considerable political and economic influence across the region, much of which was formerly part of the Soviet Union.

Roberts said Russia could seek greater assistance from Kazakhstan and Uzbekistan as it attempts to secure additional gasoline and diesel supplies.

But Ukrainian energy analyst Hennadii Ryabtsev said Central Asia lacks sufficient spare refining capacity to make a meaningful difference to Russia's fuel market.

He argued that supplies from Kazakhstan, Kyrgyzstan and other countries, including India, China and Belarus, would remain insignificant compared with Russia's enormous domestic requirements.

For Central Asian governments, helping Russia could also create significant economic and diplomatic risks.

Countries considering processing or supplying Russian oil must weigh the possibility of Western sanctions, as well as the potential impact on foreign investment and trade with other international partners.

Roberts said governments in the region would have to consider how closer cooperation with Russia could affect their relationships with the wider global economy.

Vladyslav Vlasiuk, Ukrainian President Volodymyr Zelenskyy's commissioner for sanctions policy, said Kyiv did not expect Russia to find a large pool of willing suppliers.

He said governments and companies understood that additional petroleum supplies could ultimately support Russia's military effort and risk triggering sanctions.

For Moscow, the deal with Kondensat therefore represents more of a temporary source of relief than a solution to its broader refining crisis. With Ukrainian strikes continuing to put pressure on Russia's energy infrastructure, the Kremlin may increasingly have to rely on overseas facilities to supplement a domestic fuel system under growing strain.