Russian President Vladimir Putin has authorized temporary state management of oil refineries and other critical infrastructure damaged by Ukrainian drone attacks if their owners fail to adequately protect the facilities or resume operations in time.
The Aug. 24 decree also applies to energy, industrial, communications, utility, transport and logistics assets, placing fresh pressure on refinery operators already coping with repeated strikes and fuel shortages.
“It is also about expropriation,” political analyst Kirill Rogov told Dozhd TV. “The decree makes owners pay for drone protection and swiftly restore damaged facilities at their own expense, saying that protection with air defenses is not the state’s responsibility but their own.”
The decree lets the government, acting on Putin’s instructions, take temporary management of a company’s Russian assets – including property, securities, shareholdings and other rights. Rosimushchestvo, the Federal Agency for State Property Management, would manage the assets unless the government names another administrator. The measure does not formally transfer ownership, but its scope makes it a de facto nationalization mechanism for companies that fail to protect or promptly repair critical facilities.
Russian oil companies, including Lukoil, Tatneft and Gazprom Neft, are working to restore refinery throughput and bring drone-damaged process units back online.
The decree came as drone attacks caused another wave of refinery disruptions. On Aug. 21, a Ukrainian strike caused a fire and damaged process units at Lukoil’s Perm refinery. Reuters, citing two industry sources, reported that the refinery stopped operations and that repairs may take up to two weeks. The damaged crude distillation unit represents about 40% of the refinery’s capacity; another primary unit, representing 34%, had been idle since July 29.
The Perm refinery processed 12.6 million metric tons of crude in 2024 and is an important Russian base oil and lubricant production hub. Its base oil plant has capacity to manufacture 480,000 tons per year of Group I base oils.
In Krasnodar Krai, a drone attack early Aug. 25 caused a fire at the Afipsky refinery. Regional authorities said drone debris also fell at the Afipskaya railway station, killing two people and injuring two. Ukraine’s General Staff confirmed it struck the refinery and said the extent of damage was being assessed. The refinery has crude processing capacity of 6.25 million t/y.
On the same night, drones struck the Novoshakhtinsk refinery in Rostov Oblast. Gov. Yuri Slyusar said the facility was damaged and temporarily suspended operations. The plant has been attacked repeatedly during the war.
Russia has responded to widespread refinery outages with product-export restrictions, looser fuel specifications and imports, but gasoline limits and queues have again appeared at service stations, including in Moscow. Damage to refineries cuts not only fuels output but also feedstock availability for base oil and lubricant production.
“Many oil wells are set for mothballing,” Russia-focused oil analyst Mikhail Krutikhin said. “Sources inside Russia tell me this is a sign of a long-term decline in Russian oil production.”
The decree may force owners to repair facilities faster, but it cannot eliminate the risk of repeated attacks, constrain repair-equipment shortages or replace lost refinery capacity. For the lubricants market, that leaves supply prospects tied to the durability of repairs at plants such as those in Perm, Volgograd or Nizhnekamsk.