Top Western oil companies are reaping significant benefits from the ongoing assaults on Russia’s oil sector, resulting in a dual increase in both literal and economic damage. These attacks, particularly through Ukrainian drone strikes targeting Russia’s extensive network of refineries and export terminals, have severely impacted the country’s exports of refined products like diesel and fuel oil. In September, Russia’s seaborne refined product exports plummeted by 500,000 barrels per day from 2025 highs, reaching around 2 million barrels per day—its lowest level in over five years, as reported by Kpler data. This reduction in Russian exports has subsequently elevated global refining margins, favoring major energy companies such as Shell, Exxon Mobil, Chevron, and France’s TotalEnergies, which collectively manage nearly 11 million barrels per day, accounting for over 10 percent of global refining capacity.
In the third quarter, these four firms observed a collective 61 percent increase in profits from refining activities compared to the previous quarter, which significantly contributed to their overall profit rise of 20 percent. Exxon, the largest US oil company, reported a more than 30 percent increase in earnings from its energy product division, reaching $1.84 billion in quarterly revenue, driven by robust refining margins attributed to supply disruptions.
BP, expected to announce results soon, is also anticipated to benefit from favorable global refining conditions. The firm’s refining indicator margin, a critical gauge of its global operations, surged to $15.8 per barrel during the third quarter, marking a 33 percent quarter-on-quarter increase, and is showing $15.1 per barrel thus far in the fourth quarter. Enhanced refining profits are expected to offset declines in oil prices as the market appears to shift towards a significant oversupply. Additionally, the volatility in energy markets, exacerbated by Western sanctions and various geopolitical conflicts, has bolstered the trading sectors of oil majors, particularly Shell, BP, and TotalEnergies, allowing them to capitalize on minor fluctuations in supply and demand.
Shell, the leading oil trader globally—while not disclosing specific profits from its trading division—highlighted that higher trading and refining margins augmented its chemicals and products division earnings by $706 million in the third quarter compared to the prior three months.
Refining margins are likely to remain elevated in the near future, especially following the recent escalation of Western governmental efforts to compel Moscow to cease its aggression in Ukraine. The European Union intensified its economic measures against Russia, announcing plans in July to ban imports of fuels derived from Russian crude oil by January 2026. This ban seeks to close gaps in previous sanctions that had enabled refiners in countries like India and Turkey to utilize discounted Russian feedstock for producing diesel and jet fuel, which was often sold to Europe.
The recently approved ban enhances the competitive standing of Western oil firms, as non-Russian crude and refined products will see increased demand due to these sanctions. Furthermore, a significant development occurred when U.S. President Donald Trump sanctioned Russia’s top two oil companies, Rosneft and Lukoil, on October 22. These two companies are responsible for 5 percent of global crude supply and 3.3 million barrels per day of crude and refined product exports, which constitute nearly half of Russia’s total.
As a result of these sanctions, oil prices and refining margins have surged, compelling buyers of Russian crude and products, particularly in India and Turkey, to seek alternative sources.
The combination of mounting Western sanctions and the drone strikes raises questions about whether the oil market will witness a resurgence reminiscent of the sharp price increases following Russia’s invasion in 2022, which resulted in record earnings for oil companies. However, it is unlikely that such a price rally will repeat, as the current oil market is well-supplied and better equipped to handle the ramifications of sanctions, particularly with the growth of the so-called “shadow fleet” of tankers that have managed to bypass Western measures to trade Russian oil.
Nonetheless, the assault on Russia’s oil and gas industry is expected to continue benefiting Western oil giants, which have extensive upstream production capabilities alongside broad refining and trading operations.
By Ron Bousso
Published on November 3, 2025
