Yes, Ukraine has substantial oil and natural gas resources. The country sits on some of Europe’s largest hydrocarbon deposits, with discovered reserves of roughly 1.6 billion barrels of oil and 59 trillion cubic feet of conventional gas in its main producing basin alone. Beyond conventional reserves, Ukraine holds an estimated 1.2 trillion cubic meters of technically recoverable shale gas and close to 3 trillion cubic meters of coalbed methane resources. These figures place Ukraine among the top energy-resource holders in Europe, though conflict and underinvestment have kept much of that potential locked underground.
Where the Oil and Gas Sit
Ukraine’s hydrocarbons are spread across three main geological zones. The Dnieper-Donets basin, stretching across the eastern half of the country, is the principal producer and holds the bulk of discovered reserves. Most of the oil and gas there is trapped in deep rock layers dating back hundreds of millions of years, sealed beneath thick salt deposits.
The Carpathian region in western Ukraine is the second key area, with smaller but meaningful gas fields that have been producing for decades. The third zone is offshore: the Black Sea shelf and the Sea of Azov hold significant untapped potential. In 2012, Ukraine offered exploration tenders for two offshore areas (Foros and Skifska) alongside two major onshore shale blocks, all under 50-year production-sharing agreements designed to attract foreign investment.
How Much Ukraine Produces Today
Ukraine produced about 617 billion cubic feet of dry natural gas in 2023, making natural gas the single largest component of the country’s primary energy output at 38% of the total. That production covered nearly all of domestic demand: Ukraine’s gas self-sufficiency ratio reached 0.95 in 2024, meaning the country now meets about 95% of its own gas needs from domestic wells. Total gas consumption in 2023 was 696 billion cubic feet, so the gap between what Ukraine pumps and what it burns has narrowed dramatically compared to earlier years when the country depended heavily on Russian imports.
State-owned Naftogaz, the dominant producer, has been drilling aggressively. The company commissioned 83 new wells in 2024 alone while also redeveloping older legacy wells to squeeze more gas from mature fields. That effort has kept production climbing even as the war disrupts operations in some eastern areas.
Oil production is far more modest. Ukraine has never been a major crude oil producer, and the destruction of its refining infrastructure has made the situation worse. The country previously imported crude from Azerbaijan and Kazakhstan to feed its one operational refinery.
Shale Gas and Unconventional Potential
Ukraine’s unconventional gas resources are enormous on paper. The Yuzivska block in the east covers nearly 7,900 square kilometers and was expected to require around $3.7 billion in production-stage investment. Royal Dutch Shell won the development bid but pulled out in 2015. The Oleska block in western Ukraine spans about 6,300 square kilometers and would have needed roughly $3.1 billion to bring into commercial production. Chevron abandoned that project too.
Both companies cited the same reasons: heightened geopolitical risk after Russia’s 2014 annexation of Crimea and a collapse in European gas prices that cut the market value of the resource by more than half. None of these shale deposits have been commercially developed, leaving over a trillion cubic meters of recoverable shale gas essentially untouched.
Refining Infrastructure Is Largely Gone
Ukraine has six oil refineries on paper, but they have sat largely idle for more than a decade due to lack of investment or proximity to the fighting in the east. The Kremenchuk refinery, with a capacity of 18 million metric tons per year, was the only facility still operating under Ukrainian control. It processed imported crude from Caspian producers. Russian airstrikes reportedly destroyed or permanently disabled it.
Ukraine also seized the previously idle Odessa refinery from Russian ownership, though that facility had already been damaged by missile attacks. In practical terms, Ukraine currently has no significant domestic refining capacity, which means it relies on imported refined petroleum products for transportation fuel and other needs.
How the War Changed the Picture
The Russian invasion has reshaped Ukraine’s energy landscape in several ways. Gas production sites in the east have been the most vulnerable. Output dropped sharply in the first months of the full-scale invasion in 2022, though Ukraine clawed back some losses after regaining territory in the Kharkiv region later that year.
Russia has systematically targeted gas infrastructure, including production sites, transmission networks, and storage facilities. Two underground storage sites, Krasnopopivske (0.42 billion cubic meters) and Verhunske (0.4 billion cubic meters), are located under Russian-occupied territory. Surface facilities at other storage sites have sustained damage from missile and drone strikes, though underground gas inventories have remained intact.
In an unusual turn during August 2024, Ukrainian forces conducting a cross-border offensive into Russia’s Kursk region reportedly took control of the Sudzha gas metering station, the only remaining entry point for Russian gas flowing into Ukraine and onward to parts of Europe.
Underground Storage as a Strategic Asset
One of Ukraine’s most underappreciated energy assets is its underground gas storage network. With 31 billion cubic meters of total capacity, Ukraine’s storage system is the third largest in the world, behind only the United States and Russia. That capacity exists because Ukraine spent decades as the main transit corridor for Russian gas flowing to Europe, and its domestic consumption used to be far higher.
About 25 billion cubic meters of that storage sits in western Ukraine, well away from the front lines. Another 2 billion cubic meters is in central Ukraine. Only about 4 billion cubic meters is near the eastern entry points, partially on occupied territory. Despite this massive capacity, utilization has been low. In mid-2024, only about 5 billion cubic meters (roughly 17% of capacity) was filled. Energy analysts have pointed to this storage as a potential flexibility tool for European gas markets, since it could absorb surplus gas in summer and release it during winter demand peaks.
Why the Resources Stay Underdeveloped
Ukraine’s energy story is one of vast potential held back by compounding obstacles. Soviet-era infrastructure was never fully modernized. The 2014 conflict in the Donbas scared off the international oil companies that had committed billions to shale development. The full-scale invasion in 2022 destroyed refining capacity and put eastern production sites at risk. Even the offshore Black Sea prospects became inaccessible after Russia’s annexation of Crimea and its naval control of surrounding waters.
The result is a country that holds some of the largest hydrocarbon reserves in Europe but produces only a fraction of what those reserves could yield. At 95% gas self-sufficiency, Ukraine has made real progress in reducing its dependence on Russian imports. But tapping into its shale gas, coalbed methane, and offshore reserves would require the kind of long-term, capital-intensive investment that remains difficult to attract while the country is at war.