When Did The War Move Inside The Refineries?
A book on how the last great war was actually won explains what the US just did to Iran and what Ukraine is doing to Russia.
Dear Merchants,
2 big wars are being fought right now, and the standard news frame does not fit either of them.
On the surface, the first is between the United States and Iran. The second is between Russia and Ukraine, beneath the surface they are the same war.
Both are being fought inside oil refineries.
I have been reading a book about the Second World War, and it explains the last 48 hours better than any newspaper.
The historian Phillips Payson O’Brien argues in “How the War Was Won” (2015) that the last great war was not decided by tanks or battleships. It was decided by attacks on the industrial systems that made tanks and battleships possible.
What is happening at Lavan Island, at Omsk, and in the Strait of Hormuz is the same lesson with new tools. Drones instead of B-17s.
The Frame O’Brien Would Recognize
The story of the Second World War most people know is the Hollywood one. Generals, big maneuvers, famous battles. Stalingrad, El Alamein, Midway, Normandy. That story is true, and it is incomplete. O’Brien’s point is that the front lines were decided long before the front lines, in the factories, refineries, shipyards, and supply chains behind them.
His core idea is simple.
You do not beat a modern army by destroying it in battle, you beat it by cutting off what keeps it alive. Bombers, submarines, and blockades became tools to choke the enemy from within. Cut off the fuel, the spare parts, and the ability to keep tanks moving and planes flying and the army at the front slowly stops being an army.
Germany is the clearest example. Its early victories sat on top of a chronic fuel shortage and an industrial base far less flexible than its enemies. Allied bombers hit the Ploiesti oil fields in Romania in 1943 and 1944, then the synthetic fuel plants at Leuna and Merseburg.
The naval blockade cut off raw materials at the source.
By late 1944 the Luftwaffe had planes it was unable to fuel and pilots it had no gasoline to train. Germany was structurally beaten long before it was militarily beaten.
Japan is the same story told through water. US submarines sank the merchant fleet that carried oil from the East Indies, and once Japan was unable to replace ships, aircraft, pilots and fuel, the outcome was decided. No battlefield tactic was going to change it.
That is the lesson I take from O’Brien.
War stopped being a fight between armies and became a fight between industrial systems. Campaign maps tell you where the fighting happened, industrial statistics tell you who won and why. This week’s headlines follow the script line by line.
The War Moved Back Inside The Refineries
Start in the Gulf, On 6 and 7 July, Iran’s Revolutionary Guard fired missiles at 3 commercial tankers in the Strait of Hormuz. On 7 July the US answered with strikes on more than 80 targets inside Iran per CENTCOM: air defenses, command centers, coastal radars, anti-ship missile sites, and over 60 IRGC small boats.
The second night went wider. Per Axios, cruise missiles destroyed 2 railway bridges in northeastern Iran, the first American strikes on Iranian infrastructure since the April 8 ceasefire, and the target list stretched from Bandar Abbas to Sirik, Chabahar, and Lavan Island.
Railway bridges, that is a detail straight out of O’Brien’s index. On top of the strikes, Washington revoked the June 22 OFAC license that had let Iran sell crude and refined products, with a wind-down deadline of July 17.
On 8 July, Trump stood at the NATO summit in Ankara and declared the ceasefire “over”. Then, aboard Air Force One, he added that Iranian officials “called a little while ago.
They want to make a deal”.
Keep that quote in mind, because it matters in the premium section.
Iran’s refining system was bleeding before this week. Lavan, a 55 to 63 kb/d refinery with 5.5 million barrels of crude storage, was first struck on 7 April, 1 day before the ceasefire.
NIORDC calls it “heavily damaged” and expects only 70 to 80% of capacity back within 1 to 2 months. Add the earlier hits at Kharg and Sirri, and Iran’s exports now squeeze through 1 door: Jask, a terminal built for 1 mb/d, running at roughly 300 kb/d.
Now go 3,000 km north.
About 2 mb/d of Russian refining capacity is offline because of Ukrainian drone strikes, roughly 1/3 of the country’s refining system per Reuters.
The list of confirmed hits in 2026 reads like an atlas: Perm, Bashneft-Novoil in Ufa, Syzran, Slavyansk, Moscow, Omsk. On 7 July, Ukraine hit Omsk, Russia’s largest refinery at 420 kb/d, roughly 8% of national capacity, sitting 2,500 km from the front line.
The damage is visible at street level. Fuel rationing has reached at least 56 regions, and shortages touch nearly all 83. Crimea has full bans on public fuel sales and 18 hour queues at stations. Gasoline production runs about 20% below domestic demand.
On 8 July, Russia banned diesel exports until 31 July to protect its own pumps, and it is now importing gasoline from India.
Gazprom shares just printed 91.55 RUB, a 17 year low, the worst level since the 2008 crisis. Even Deputy Prime Minister Novak admits in public that “terror attacks” damaged refineries, that gasoline output has been cut, and that “the situation remains complex”.
Same Playbook, Different Technology
Why the refinery and not the oil field? Because crude is useless until something turns it into fuel.
Hit the refineries, damage the storage, disrupt the export ports, strain the railways, and the crude has nowhere to go.
Russia still pumps around 9 mb/d per IEA data, and its citizens still queue for gasoline. Iran still owns its barrels, and they sit at sea with no buyer.
Ukraine is not attacking Russian oil, it is attacking the machinery that turns oil into mobility: fuel for trucks, for farms, for military logistics.
The US is not attacking Iranian tankers for their own sake. It is attacking Iran’s ability to turn crude into revenue and fuel. Ships are now part of the target set too.
The Al Rekayyat, a Qatari LNG tanker owned by Nakilat, was struck near Oman’s coast this week after loading at Ras Laffan. The Yasa Polaris, a Chevron chartered Aframax, was hit by a Ukrainian drone on 7 July near the CPC terminal off Novorossiysk. Even Western chartered ships loading Kazakh crude at Russian controlled terminals are now treated as targets.
In 1944 the tools were B-17s over Leuna and submarines in the Pacific.
In 2026 they are drones over Omsk and cruise missiles on Iranian railway bridges.
The method is identical, only the tools changed.
So the war has moved back inside the refineries.
