A fire at the Omsk oil refinery, as the region’s governor says the province was hit by a Ukrainian drone, in Omsk, Russia, on July 6, 2026, in this photo obtained from a social media video.
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Ukraine’s drone strikes have been in the spotlight over its war with Russia and NATO’s investment thesis.
After boosting drone production and capabilities four years into the war, Ukraine has stepped up its attacks on Russian energy infrastructure and military assets, targeting high-profile oil refineries in major cities as part of a sustained effort to cut off Russia’s energy revenues.
Defense experts and strategists have hailed Russia’s drone campaign as vital to helping curb its military momentum, while warning that Kiev’s deep strike successes significantly increase the risk of escalating tensions.
Earlier this week, Ukraine marked one of the country’s deepest attacks ever on Russian territory in the war.
Ukrainian President Volodymyr Zelensky was forced to resign after plumes of black smoke were seen billowing from a major oil refinery in the city of Omsk on Tuesday. declared The country’s advanced drone capabilities have brought Siberia “within reach.” The Omsk facility is located about 2,500 kilometers (1,553 mi) from Ukrainian territory and close to Russia’s border with Kazakhstan.
Ukraine’s progress on the battlefield highlights how the rapid adoption of drones is reshaping modern warfare, as warfare becomes more autonomous, connected and data-driven.
How are drones changing the Russia-Ukraine war?
According to Bob Tolast, a research fellow on land warfare at the Royal United Services Institute, a London-based defense and security think tank, two things have changed to allow Ukraine to ramp up its long-range drone strikes within Russian territory.
Tolast said a concerted effort by Ukrainian forces to boost production and improve inertial navigation, software and machine vision has helped improve resiliency when satellite navigation is jammed.
Foreign support for Ukraine also likely played a role, he said, adding that oil refineries and terminals were major targets.
In this pool photo distributed by Russian state agency Sputnik, Russia’s Vladimir Putin addresses the audience at the 23rd Congress of the United Russia party in Moscow on June 28, 2026.
Yekaterina Shtyukina AFP | getty images
“We’ll see how Russia responds, they’ve had limited success with nets and drone interceptors like Ukraine did, and have also put air defense systems on towers and more recently on high-rise buildings for some time,” Tolast told CNBC by email.
He added, “But Ukraine’s domestically produced cruise missiles like the Flamingo targeting industrial sites (including air defense production) make the picture much worse for Moscow.”
“Ukraine’s counter-refinery campaign is now raining blowback, but it is too early to say whether Russia will suffer lasting damage as the region has long had excess capacity,” Tolast said.
Russia has also responded by increasing its own drone production and integrating them into its overall military.
NATO is building a ‘drone-ready alliance’
Beyond the front lines, Ukraine’s drone campaign has also affected NATO’s defense spending plans.
NATO Secretary General Mark Rutte Said Citing the Russia-Ukraine war as an example, it said on Tuesday that drones have “fundamentally changed” the character of modern warfare and have become a “decisive factor” on the battlefield.
Rutte’s comments came as he announced the launch of the alliance’s so-called NATO Drone Age initiative, a plan in which the allies are expected to invest more than $40 billion in counter-drone capabilities over the next five years.
Turkish Vice President Cevdet Yilmaz looks at a model of the Bayraktar drone during the defense industry forum at the NATO summit in Ankara, Turkey on July 7, 2026.
Nurfoto | Nurfoto | getty images
“Together, we are building a drone-ready alliance. We are leveraging the latest innovative technologies, investing in our transatlantic defense industries, and learning real-world lessons from the battlefield in Ukraine,” Rutte said.
As well as cutting off Russian energy revenues, Ukraine’s drone strikes are designed to force Russian President Vladimir Putin to end the war.
Ukraine’s success on the battlefield has prompted a change in the way the country is viewed and its relations with NATO and the EU. Security analysts and world leaders alike have highlighted that Ukraine has something to offer allies and should not be seen merely as a beneficiary of military support and donations.
Ukraine is winning because they have become good at drones and counter-drone systems — technologies that other NATO allies are not very good at, Ulrike Franke, senior policy fellow at the European Council on Foreign Relations, told CNBC.
Ukraine holds all the cards, he said, and they have “drones and counter-drone systems, and also the data on how to actually fight the Russians.”
This comes as warfare is undergoing a sea change, where expensive, more traditional technology is being challenged by more agile, decentralized models, often led by startups and informed by what happened in Ukraine.
Morningstar analyst Loredana Muharremi said Ukraine became a global leader in drone warfare out of necessity. “Facing a larger and better equipped military, it could not compete symmetrically, forcing it to innovate rapidly with low-cost, commercially available drones adapted for military use.”
“The real innovation was not the technology, but the procurement model,” he said in emailed comments to CNBC.
During the four-and-a-half-year war, Ukraine has created a much faster innovation cycle than legacy defense companies, which often take years.
People refuel their cars at a petrol station in Moscow on June 24, 2026.
Alexander Nemenov AFP | getty images
Muharremi said collaboration between the military, domestic startups and private industry has allowed new technologies to be deployed in a matter of weeks and the drones to continually evolve based on battlefield response.
“The biggest (financial) impact is expected to come through higher order intake and backlog over the next two to three years, with a more meaningful contribution to revenues and earnings from 2028 onwards,” Muharremi said.
Finland stub: Ukraine has new advantage
Finnish President Alexander Stubb said Ukraine’s Zelensky now “holds the cards” to conduct long-range drone strikes, which the Trump administration has said. Said It was not approved in October last year.
“There are two different issues here. He has cards for long-range attacks, so the drones and missiles he’s hitting are hitting Russian oil refineries, and reducing their ability to produce and export by 40%,” Stubb told CNBC on Tuesday.
“And that’s really changing the atmosphere with the Russian population, which is now against war for the first time. So, it’s bound to have an impact on Russia’s strategic thinking.”
However, Finland’s president warned that “we should not smile about it,” adding that Ukraine needed air defense to step up its war effort.
US President Donald Trump held separate talks with Russia’s Putin and Ukraine’s Zelensky over the weekend and said on Monday that a resolution to the conflict was “moving closer than people anticipated.”