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Ukrainian forces continue their long-range strike campaign against Russian military assets and oil infrastructure, exploiting vulnerabilities in Russian air defenses. Ukrainian President Volodymyr Zelensky reported on May 3 that Ukrainian forces struck a Russian Karakurt-class small missile ship, a Russian patrol boat, and a Russian shadow fleet oil tanker near the port of Primorsk, Leningrad Oblast, and that the strikes also significantly damaged the oil loading infrastructure at the port. The Ukrainian Special Operations Forces (SSO) noted that the Karakurt-class small missile ship was equipped with an unspecified launcher (presumably a Kalibr cruise missile launcher) and eight Kalibr cruise missiles with a range of up to 2,000 kilometers and a sea-based Pantsir-M naval air defense system at the time of the Ukrainian strike. NASA Fire Information for Resource Management System (FIRMS) data for May 3 shows heat anomalies at the port of Primorsk. Leningrad Oblast Governor Aleksandr Drozdenko claimed on May 3 that Russian air defenses downed over 60 Ukrainian drones on the night of May 2 to 3 and acknowledged that Ukrainian drones caused fires near the port of Primorsk. Zelensky reported on May 3 that Ukrainian forces also struck two Russian shadow fleet ships at the entrance to the port of Novorossiysk, Krasnodar Krai, with unmanned surface vessels (USVs). Satellite imagery captured on May 3 indicates that Ukraine’s April 28 to 29 and April 30 to May 1 strikes against the Transeft Perm Linear Production Dispatch Station, Perm Krai, burned roughly 70 percent of the station, destroyed all the tanks with a 50,000 cubic meter capacity, and halted operations at the station for an unspecified time period. Ukrainian forces have been steadily increasing the range, volume, and intensity of their long-range strike campaigns against Russian oil infrastructure and military assets in Russia and occupied Ukraine’s territories since mid-March 2026, heavily targeting port and oil infrastructure in Leningrad Oblast and Krasnodar Krai. Ukrainian forces are using Ukraine’s intensified domestic air and naval drone production to intensify strikes against Russia. Ukrainian forces are exploiting the large attack surface of Russia’s deep rear and the wide footprint of Russian oil infrastructure and military assets. Continued Ukrainian drone strikes are degrading Russia’s ability to store and transport oil and are impacting Russian oil export revenues, which may partially offset the elevated Russian revenues from global spikes in oil prices.
Russia’s additional revenues from rising oil prices are likely insufficient to fundamentally change the course of Russia’s growing economic issues. Russian Finance Minister Anton Siluanov told Kremlin journalist Pavel Zarubin on May 3 that the Russian federal budget expects to receive an additional 200 billion rubles in revenue due to rising oil prices over an unspecified period, but that Russia’s income revenue and expenditures over the past two months (since about March 2026) have remained at similar levels. Russian military recruiters notably increased sign-up bonuses for contract soldiers in mid-February 2026 after previously decreasing sign-up bonuses in 2025. The Associated Press (AP) reported on May 2 that the economic impact of Ukraine’s intensifying long-range strike campaign against Russian oil infrastructure in the Russian rear remains unclear, as rising oil prices driven by the Iran war and the easing of US sanctions may help the Kremlin replenish revenues. Ukrainian President Volodymyr Zelensky recently stated that Ukrainian strikes on Russian oil infrastructure have caused Russia to lose at least $7 billion in revenue since the start of 2026, and that Ukrainian strikes have left several of Russia’s key oil ports, such as Ust-Luga and Primorsk in Leningrad Oblast, operating below capacity. The International Energy Agency’s (IEA) April 14 Oil Market Report found that Russian crude and oil product exports rose by 320,000 barrels per day month-on-month, hitting 7.1 million in March 2026 and almost doubling Russian oil export revenues to $19 billion from $9.7 billion due to the rising prices. The IEA noted that it remains unclear whether Ukraine’s strikes in April 2026 will disrupt this trend.
Senior Russian bankers continue to express worries over economic issues that will continue to mature throughout the 2026 fiscal year, despite increased Russian oil revenues. Sberbank CFO and Management Board Deputy Chair Taras Skvortsov stated on April 29 that Russia expects the ruble to weaken in the second half of 2026 with forecasted exchange rates of 80 to 90 rubles per $1 US dollar compared to current exchange rates at around 75 rubles per $1 US dollar. Skvortsov noted that the ruble will likely weaken more in the fourth quarter than in the third quarter. Skvortsov stated that new Russian tax laws intended to replenish the budget have led Russian businesses and consumers to use cash payments more often, which Skvortsov warned could worsen the economic situation in Russia by increasing the size of Russia‘s grey economy, which increases the costs of goods and services without generating desired tax revenues. The Kremlin has enacted a series of economically sub-optimal policies, such as increasing the value-added tax (VAT) and lowering the key interest rate despite high Russian inflation, while also steadily depleting its sovereign wealth fund’s liquid reserves to buttress federal budget deficits from unsustainably high defense spending, which Russia’s economy will struggle to overcome despite temporary cash influxes from global oil price spikes.
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