Russia Under Drone Pressure: Fuel Crisis Could Hit Harvests and Grain Exports

1. Drone warfare reaches deep into Russia

Ukraine's campaign is no longer focused only on depots and bases close to the front. Long-range drones are now reaching refineries, terminals and pumping stations hundreds, and sometimes thousands, of kilometres from Ukrainian-held territory. The clearest example was the strike on the Omsk refinery, Russia's largest, around 2,700 kilometres from Ukrainian-controlled territory.

According to the Wall Street Journal, all ten of Russia's largest refineries have been attacked and more than a quarter of national refining capacity has been knocked offline at least temporarily. That does not mean a quarter of the sector has been permanently destroyed. Some units return to operation, but repeated strikes complicate repairs and force Russia to spread air-defence assets across a vast territory.

The campaign's effectiveness should not be measured only by the number of refineries destroyed. Damage to a crude distillation unit, a fuel-upgrading installation or a power system can sharply reduce output even when most buildings remain intact.

Sources: WSJ, Reuters.

2. Russia has crude oil, but not enough fuel

The Russian fuel paradox is straightforward: crude oil cannot power a car, combine harvester or aircraft. It must first be refined into gasoline, diesel or jet fuel. Russia can therefore continue exporting crude while suffering shortages of finished products at home.

In early July, Russian gasoline output was equivalent to only about 65% of seasonal demand, according to industry sources and Reuters calculations. The daily shortfall was estimated at 40,000–45,000 tonnes. Queues, sales limits and the use of emergency stocks followed.

Moscow also began importing gasoline. At least 60,000 tonnes were shipped from India, while deliveries from Belarus reached record levels. For a state that has long presented itself as an energy superpower, the image is politically awkward: Russia exports crude but imports a product it cannot currently refine in sufficient volumes.

The Kremlin also restricted diesel exports. Russian loadings fell to roughly 234,000 barrels per day in the first ten days of July, compared with an average of 817,000 barrels per day in 2025. The measure protects some domestic supply, but reduces refinery revenue and pushes up fuel prices internationally.

Sources: Reuters — gasoline, Reuters — imports from India, Reuters — diesel.

3. The Sea of Azov becomes a bottleneck

The second pressure point is the Sea of Azov, a small and shallow basin used both to supply Crimea and to move Russian grain. Shipping depends on a few narrow passages, above all the Kerch Strait and the Don–Azov channel.

After a Ukrainian attack on 13 vessels, including ten tankers, Russia restricted traffic through both routes. Ships could still move inside the sea, but entering and leaving became difficult. The restrictions remained in place on 13 July, although no formal public order had been issued.

Ukraine does not need to sink a large number of vessels to produce an operational effect. A drone can burn a bridge, damage an engine room or simply raise the risk enough for shipowners to reduce sailings, insurance costs to rise and Russian authorities to stop traffic themselves.

The route matters because industry sources estimate that roughly one quarter of Russian grain exports pass through the Sea of Azov. Reports of the restrictions alone sent Euronext wheat futures up as much as 4% in one session.

Sources: Reuters — traffic halt, Reuters — 13 July update.

4. Fuel, harvests and Russian agriculture

For agriculture, diesel matters more than gasoline. It powers tractors, combines and the trucks moving grain to elevators, storage sites and ports. Farmers in Russia's grain belt have raised concerns that shortages and high prices could disrupt the harvest. Vladimir Putin publicly described agricultural fuel supplies as a priority, acknowledging that the harvest depends on them.

There is still no basis for predicting a collapse in Russian crop production. USDA forecasts a wheat harvest of around 88.5 million tonnes. A logistics crisis is more likely than a production crisis: the grain may be harvested, but moving, storing and exporting it will become slower and more expensive.

If Azov shipments are repeatedly interrupted, more grain will be redirected to Novorossiysk, Taman and other terminals. Those ports do not have unlimited capacity. Moving millions of tonnes requires additional railcars, trucks, loading slots and — once again — diesel.

Sources: Reuters, USDA, Grain: World Markets and Trade.

5. What happens to wheat exports?

Russia remains the world's largest wheat exporter. USDA forecasts shipments of 47.5 million tonnes in 2026/27, against global trade of about 214.5 million tonnes. Russia therefore accounts for more than 22% of the market.

It would be wrong to assume that a quarter of Russian grain automatically disappears because that share uses the Azov route. Some cargoes will be redirected, some exported later and some held in storage for longer.

The most likely scenario is that Russia remains the leading exporter but falls short of the current USDA projection. A realistic range is about 45–46 million tonnes, or 1.5–2.5 million tonnes below the official forecast. This would not create a global supply shock, but it would be enough to encourage importers to secure cargoes earlier and keep a geopolitical risk premium in prices.

The situation would become much more serious if effective strikes also reduced capacity at Novorossiysk or Taman. The Sea of Azov can be partly bypassed. The loss of major Black Sea terminal capacity would be much harder to replace.

Data source: USDA, July 2026. The 45–46 million tonne estimate is a BriefRooms scenario.

Conclusion

Ukrainian drones have not stopped the Russian economy, but they have forced the Kremlin into increasingly expensive shortage management: limiting fuel exports, drawing on reserves, increasing imports and rerouting transport.

Russia will probably harvest a large wheat crop and remain the world's leading exporter. The main risk is not a lack of grain, but the simultaneous appearance of three bottlenecks: fuel shortages, overloaded transport networks and disruption at ports and shipping routes.

The most likely outcome is not a global food crisis, but a moderate decline in Russian export performance and a gradual rise in wheat prices over the coming months.