July 6, 2026, in Omsk, Russia, fire at Omsk oil refinery, which the region’s governor said was attacked by Ukrainian drones. This photo was taken from a social media video.
Reuters
Drone strikes in Ukraine have dominated headlines regarding the war with Russia and upended NATO’s investment thesis.
Ukraine, which has built up drone production and capabilities over four years of war, is ramping up attacks on Russia’s energy infrastructure and military assets, targeting high-profile refineries in major cities as part of continued efforts to cut off Russia’s energy revenues.
Defense experts and strategists describe Russia’s drone campaign as critical to stalling Russia’s military momentum, while warning that the successful Kiev barrage greatly increases the risk of escalation.
Earlier this week, Ukraine carried out what is believed to be one of the heaviest attacks on Russian territory in the war so far.
Black smoke was seen billowing from a major oil refinery in the city of Omsk on Tuesday, and Ukrainian President Volodymyr Zelenskiy declared that the country’s improved drone capabilities had put Siberia “within reach.” The Omsk facility is located about 2,500 kilometers (1,553 miles) from Ukrainian territory and close to the Russian-Kazakh border.
Ukraine’s progress on the battlefield focuses on how the rapid adoption of drones is reshaping modern warfare as combat becomes more autonomous, connected and data-driven.
How drones will change the war between Russia and Ukraine
Two things have changed to allow Ukraine to accelerate long-range drone strikes deep into Russian territory, said Bob Thorast, a land warfare researcher at the Royal United Services Institute, a London-based defense and security think tank.
Thorast said the Ukrainian military’s concerted efforts to increase production and improve inertial navigation, software and machine vision have helped improve resilience in the event satellite navigation is disrupted.
He noted that foreign aid to Ukraine also likely played a role, with refineries and terminals being huge targets.
This pool photo distributed by Russian state news agency Sputnik shows Russian President Vladimir Putin addressing the audience at the 23rd Congress of the United Russia Party in Moscow on June 28, 2026.
Ekaterina Shtukina | AFP | Getty Images
“Let’s see how Russia reacts. Russia has had limited success with nets and drone interceptors like the ones used by Ukraine, but has been installing air defense systems on towers and more recently on skyscrapers for some time,” Torrust told CNBC via email.
“But the situation is quite ugly for Russia, as Ukrainian-made cruise missiles like Flamingo are attacking industrial facilities (including air defense production) on the ground,” he continued.
“Ukraine’s counter-refinery operations are now raining blows, but the sector has long had spare capacity, so it may be too early to tell whether Russia will suffer lasting damage,” Trust said.
Russia also responded by expanding its own drone production and further integrating it into its overall military.
NATO builds “Drone Readiness Alliance”
Beyond the front lines, Ukraine’s drone operations also appear to be impacting NATO’s defense spending plans.
NATO Secretary-General Mark Rutte said on Tuesday that drones have “fundamentally changed” the character of modern warfare and have become a “decisive element” on the battlefield, citing the Russia-Ukraine war as an example.
Rutte’s comments came as he announced the launch of the alliance’s so-called NATO Drone Edge initiative, a plan in which allies will 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 of the NATO Summit in Ankara, Turkiye, July 7, 2026.
Null Photo | Null Photo | Getty Images
“Together we are building a drone-enabled alliance. We are leveraging the latest innovative technologies, investing in the transatlantic defense industry, and learning real-world lessons from the battlefields of Ukraine,” Rutte said.
In addition to cutting off Russia’s energy revenues, the Ukrainian drone strikes are aimed at forcing Russian President Vladimir Putin to end the war.
Ukraine’s successes on the battlefield have led to changes in perceptions of the country and its relations with NATO and the EU. Security analysts and world leaders alike have stressed that Ukraine has more to offer allies and should not be seen simply as a beneficiary of military aid or donations.
Ukraine is winning because it’s good at drones and counter-drone systems, technologies that other NATO allies aren’t very good at, Ulrike Franke, a senior policy fellow at the European Council on Foreign Relations, told CNBC.
He said Ukraine holds all the cards, adding that it has “data on drones and anti-drone systems and how to actually fight Russia.”
It comes as warfare is undergoing major changes, with expensive, traditional technologies being challenged by more agile and decentralized models, often led by startups and inspired by what happened in Ukraine.
Morningstar analyst Loredana Muharemi said Ukraine has inevitably become the world leader in drone warfare. “Faced with a larger and better-equipped military, we were unable to compete symmetrically and were forced to rapidly innovate with low-cost, commercially available drones adapted for military use.”
“The real innovation was not the technology itself, but the procurement model,” she added in emailed comments to CNBC.
Over the course of four and a half years of war, Ukraine has developed a much faster innovation cycle than traditional defense companies, which often span several years.
People refuel their cars at a gas station in Moscow, June 24, 2026.
Alexander Nemenov | AFP | Getty Images
Muharemi said the collaboration between the military, domestic start-ups and private industry has enabled the introduction of new technology in just a few weeks and enabled drones to continually evolve based on feedback on the battlefield.
“The biggest (financial) impact will come from an increase in order volumes and backlog over the next two to three years, with a larger contribution to revenue and earnings expected from 2028 onwards,” Muharemi said.
Finland’s Stubbu: Ukraine has new influence
Finnish President Alexander Stubb said Ukrainian President Volodymyr Zelensky “holds the cards” to carry out long-range drone strikes, but the Trump administration said last October that this was not approved.
“There are two separate issues here. He has a long-range strike card, so he says drones and missiles will hit Russian refineries, reducing production and export capacity by 40%,” Stubb told CNBC on Tuesday.
“And he is actually turning the tide of the Russian people and opposing the war for the first time. So this is bound to have an impact on Russia’s strategic thinking.”
But Finland’s president said Ukraine needed air defense to strengthen its war effort and warned that “we shouldn’t be laughing about this.”
US President Donald Trump spoke separately with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky over the weekend and said on Monday that a resolution to the conflict is “closer than people think.”
