Putin’s Two Pillars of Russian Resilience Are Crumbling
Summary
Ukraine launched a large drone attack on Moscow, targeting the city’s main oil refinery and damaging key fuel infrastructure. This attack, along with falling oil and gold prices, is weakening two important parts of Russia’s economy that support President Putin during the war.Key Facts
- Ukraine conducted its largest drone attack on Moscow on June 18, hitting the main oil refinery in the Kapotnya district.
- The Kapotnya refinery supplies about one-third of the Moscow region’s fuel and may remain offline for the rest of the year due to damage.
- Ukraine focused on attacking fuel refineries, depots, and rail links that process crude oil into usable energy.
- Russia’s crude oil prices have dropped significantly, with Brent crude falling about 25% to mid-$70s and Urals crude down about 33% to low $60s per barrel.
- Gold prices, once at record highs for Russia, have dropped by more than 25% from January, reducing its value as a financial safety net.
- Russia’s federal budget faced a 4.6 trillion ruble deficit in early 2026 due to a 45% decline in oil and gas revenue.
- Russia has begun importing gasoline by sea and extended export bans amid fuel shortages and rationing spreading across Moscow and other regions.
- Russian officials recognize the attacks as a threat to society and are considering suspending diesel exports to protect local fuel supplies.
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