Ukraine’s intelligence service has sounded the alarm over Russia’s shrinking energy reserves, warning that Moscow’s oil sector is on the brink of a long-term decline just as Ukrainian strikes take a growing toll on its infrastructure.

According to the report, Russia has about 13.2 billion tons of proven, economically recoverable oil—enough for roughly 25 years of production at current levels. Nearly all known deposits are already in use, leaving little room to expand output.

This comes at a time when oil and gas account for nearly 78% of Russia’s federal budget revenue, underscoring its dependence on the sector to fund the war in Ukraine. Yet confidence in the industry is collapsing: auctions for new extraction rights in 2024 brought in only $50 million, with half of that tied to gold mining rather than oil.

Experts warn that Russia lacks both the funding and the advanced technology needed to tap more remote or geologically difficult reserves. Within the next decade, these constraints could cause a sharp fall in production, threatening the country’s energy and economic stability.

Meanwhile, Ukraine has stepped up its campaign against Russian refineries. A wave of drone strikes over the past month has disabled about 17% of refining capacity, disrupting fuel supplies and hitting one of the Kremlin’s most vital sources of wartime income.

With European markets largely closed due to sanctions, Russia is leaning heavily on Asian buyers to keep its oil flowing. But as reserves dwindle, investment dries up, and infrastructure comes under attack, the long-term viability of Moscow’s energy lifeline is increasingly in doubt.