Russia’s military campaign in Ukraine is facing increasing strain as Kyiv’s drone strikes disrupt supply lines and exacerbate Moscow’s financial crisis. Ukrainian forces have targeted refineries, export terminals, and trucks in Russian-occupied territories, creating critical fuel shortages that are now affecting both civilian and military operations.
Budget Deficit Deepens
The Kremlin’s war effort is also burdened by a deteriorating financial situation. Russia’s budget deficit has ballooned to 5.9 trillion rubles ($63 billion) through April, marking a 50% increase over initial forecasts for the entire year. Defense spending has drained Russia’s reserve fund, which is now 60% below prewar levels. Russia’s economy, which grew during the early stages of the war, contracted in the first quarter of 2026 and is projected to grow by just 0.4% for the year.
Fuel Rationing and Supply Chain Disruptions
Fuel shortages are now widespread in Moscow, northern Russia, and occupied Ukrainian territories. Reports indicate that almost all major oil refineries in central Russia have halted or scaled back production due to Ukrainian drone attacks. Russian-occupied Crimea is particularly affected, with fuel supplies depleted as drones target trucks on critical highways linking the peninsula to mainland Russia.
"The gasoline shortages in occupied Ukraine are likely having a limited effect on the Russian military for the time being," analysts at the Institute for the Study of War noted. "More militarily consequential diesel shortages are beginning to materialize."
Kyiv’s strategy focuses on reducing Russia’s fuel output and crippling its transport capabilities. Long-range drone strikes on refineries have slashed production, while mid-range attacks on highways have disrupted fuel delivery. These disruptions extend beyond military operations, impacting Russia’s civilian economy and raising questions about the sustainability of Moscow’s war effort.