Russia's Gasoline Production Crisis
Russian gasoline production has plummeted, now covering only about 65% of seasonal demand. The primary cause is damage to oil refineries from Ukrainian drone attacks. These strikes have halted operations at the country's largest gasoline producers, including NORSI and the Omsk refinery, and forced the Saratov refinery to stop processing as well.
Daily gasoline output in Russia currently falls short of the 115,000–120,000 ton demand. The deficit reached 25% in June and 35% in July, with daily production missing the mark by 40,000–45,000 tons. Deputy Prime Minister Alexander Novak acknowledged the situation, stating,
“It is clear that the current situation at gas stations is causing concern among the population.”
Government Response to the Crisis
In response, the Russian government is preparing to ban exports of diesel, gasoline, and aviation fuel. To offset the shortfall, fuel deliveries from Belarus hit a record in June—up to 6,000 tons per day. Russia has also, for the first time, begun importing gasoline by sea from India and is tapping into strategic fuel reserves.
The fuel market turmoil has led to long queues at gas stations in some regions. As one resident noted,
“People used to come and buy 10 liters; now they fill up the tank just in case. I think that's what caused the panic.”However, if no new strikes occur, the situation may begin to stabilize in the second half of July as refineries continue to resume operations.
This crisis highlights serious vulnerabilities in Russia's energy sector, driven by external military factors. The sharp production drop and widening deficit risk escalating social tensions as the public grapples with fuel shortages. The government's response—curbing exports and boosting imports—signals an effort to regain control, though it may have lasting repercussions for Russia's fuel market.
The ongoing disruptions in gasoline production have not only led to significant shortages but have also contributed to soaring prices at the pump. For the fifth consecutive week, Russian fuel costs are reaching unprecedented highs, further intensifying the impact on consumers as the crisis unfolds. This situation underscores the interconnectedness of supply issues and market dynamics in the current energy landscape.