Fuel Crisis Looms in Russia
According to analyst Mikhail Krutikhin, Russia is approaching a fuel crisis due to drone attacks on its oil refineries. These strikes have caused regional fuel shortages, price hikes, and grounded airplanes. Krutikhin argues that Ukrainian attacks are the only effective tool for pressuring the Russian economy, unlike Western sanctions. The situation is escalating as critical infrastructure continues to be targeted.
Several Russian regions are experiencing gasoline deficits of up to 20%. Drone strikes have disabled refineries across nearly all of European Russia, leading to fuel shortages in Siberia and the Far East. A scarcity of aviation kerosene has grounded roughly 20% of major airlines' aircraft. Transport companies have raised their rates by 10%.
Government Response and Consequences
The Russian government is considering canceling the damping mechanism. The Moscow Oil Refinery has been shut down until the end of next year following attacks. Krutikhin notes that official claims of rapidly ramping up production are panic-driven. He asserts that the Kremlin is putting on a brave face while the situation deteriorates. Farmers in Irkutsk Oblast and Krasnodar Krai are complaining about fuel shortages for their equipment.
Crimea is already in a state of fuel isolation. Meanwhile, export terminals in Novorossiysk and Primorsk may come under attack. Brent crude oil prices have dropped to $70–72 per barrel, while the discount on Russian oil stands at $22–23, bringing the effective price for buyers to around $50 per barrel.
Damage from attacks on oil refineries exists, but according to Russian President Vladimir Putin, all damaged facilities are being restored quickly and do not pose critical problems.
Krutikhin emphasizes that the only sanction working against the Russian economy and budget is the Ukrainian Armed Forces. He also states that this is a pretense, a simulation of sanctions. In his view, the best way to help Ukraine is to supply more drones, missiles, and air defense systems.
In summary, Russia's fuel situation continues to worsen, with Ukrainian strikes significantly impacting the economy. Amid growing fuel deficits and rising prices, the Russian government may be forced to take emergency measures to stabilize the situation. Meanwhile, continued attacks on critical infrastructure could further intensify pressure on the Russian economy, especially given international sanctions and ongoing military operations in Ukraine.
The impact of these drone strikes is already being felt across the country, as fuel sales are being limited in numerous regions. This development underscores the growing crisis, with restrictions now affecting 32 areas in Russia. To understand the broader implications of these measures and how they relate to the ongoing fuel shortages, you can read more about the situation here.