Weak Air Defense and Drone Attacks Reduce Kremlin's Oil Revenue - FT

According to a report by the Financial Times, as conveyed by Ukrinform, the imperfect air defense system of Russia, along with numerous drone attacks, has resulted in a substantial reduction in the Kremlin's oil export revenues. Boris Dodonov, head of the energy and climate research department at the Kyiv School of Economics, stated that five attacks on key ports Primorsk and Ust-Luga, which occurred since the beginning of last week, cost Russian energy exporters approximately $970 million in revenue for the week leading up to March 29.

It is noteworthy that Primorsk and Ust-Luga account for over 40% of Russia's maritime oil export capacity. According to a Western security service representative, the attacks on Primorsk alone destroyed oil worth $200 million. Ust-Luga, in turn, provides about 8% of the world's oil volume. Data from Argus indicates that following the attacks in the last week of March, oil exports from this port decreased by approximately 70%.

Vladimir Nikitin, an analyst at Seala AI specializing in the oil industry, noted that the loading at the Primorsk terminal could resume within a few days, although not completely. He emphasized that restoring the burned tanks without harming exports could take months. The repair of processing lines at the Ust-Luga terminal, he said, could last over a month.

Local authorities indicate that there are “no forecasts regarding the reduction in intensity” of the “unprecedented attacks by hostile drones.” Kremlin spokesman Dmitry Peskov stated on Tuesday that Russia is making “intensive” efforts to protect its energy infrastructure but acknowledged the impossibility of ensuring “100% security” for Russian oil facilities.

The drone attacks are not limited to Russia's energy sector but also affect factories producing fertilizers, which also manufacture chemicals that can be used on the front line. In response, Russia has developed a multi-tiered defense system that includes electronic jamming, physical barriers, and has engaged reserve units to guard oil facilities. However, this is deemed insufficient to counter Ukraine's advancements in drone technology, the publication notes.

It is worth mentioning that Russian enterprises are forced to self-finance drone defense measures, as they are not funded by the Russian state, causing dissatisfaction among businessmen. According to Russian media, by spring 2025, up to 80% of civilian enterprises will also be required to invest in drone protection measures.

The state giant Rosneft, the largest oil exporter in Russia, has its own electronic warfare systems designed to target remotely controlled drones flying at least 35 meters high. However, these systems do not provide adequate protection against the latest models of Ukrainian drones.

In November of last year, Vladimir Putin signed a law allowing the mobilization of reservists to protect “critical” facilities from drones. The main task of the reservists is to operate as part of so-called mobile fire groups equipped with a machine gun mounted on the back of a military UAZ, as noted by the head of the State Duma Defense Committee Andrey Kartapolov.

However, one high-ranking Russian businessman remained skeptical about the effectiveness of the reservists, stating: “What good are reservists with slingshots? We had to install towers at all our factories and stretch nets between them,” he told the Financial Times, adding that at least 1.5 billion rubles ($19.1 million) had been spent on these measures.

As reported by Ukrinform, in March, Russia's tax revenues from oil nearly halved compared to the previous year.

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