A series of drone strikes that, in May alone, successfully hit Russian oil refineries 16 times — including 8 of the country's 10 largest refineries — has pushed Russia’s oil refining industry back two decades.
According to analysts at Energy Intelligence, Russian oil refining volumes fell below 4 million barrels per day during the first week of June, reaching their lowest level in 21 years. Their estimates indicate that nearly one-third of Russia’s refining capacity — about 2.14 million barrels per day — is currently offline due to Ukrainian drone attacks.
“Ukraine’s campaign against Russia’s energy sector, particularly downstream oil assets, has inflicted widespread damage, to the extent that the country appears headed this summer toward what could be its worst fuel crisis ever,” Energy Intelligence wrote.
What began as fuel shortages in Crimea has spread across Russia and now affects more than 25 regions. Restrictions on gasoline sales have appeared in major cities, including Moscow and St. Petersburg. Fuel supply disruptions have been reported in Kuzbass, Tatarstan, and the Ulyanovsk and Nizhny Novgorod regions. Gas stations operated by Tatneft have become a particular hotspot of shortages, limiting sales to no more than 20 liters per customer in at least six regions.
Following gasoline shortages, agricultural producers have also reported interruptions in diesel fuel supplies in southern Russia, the Central Black Earth region, and the Volga area. Airports in St. Petersburg, Yekaterinburg, and Ufa reportedly faced shortages of aviation fuel as early as late May. By mid-June, restrictions on refueling passenger aircraft had been introduced in six cities, including Nizhny Novgorod and Krasnodar.
“A full-scale fuel crisis is beginning to take shape in Russia,” said Finam strategist Yaroslav Kabakov. “The problem is no longer limited to seasonal price increases or exchange-traded speculation. The source of the shock is on the supply side.”
According to Kabakov, the situation is worsening because drones are increasingly targeting not the primary refinery units but secondary facilities responsible for producing gasoline and diesel fuel. “Repairs to these units take months and are complicated by sanctions that restrict access to necessary equipment,” he noted.
As fuel supplies tighten, prices continue to rise. Since the beginning of the year, wholesale prices for AI-92 gasoline have increased by 28%, AI-95 by 34%, diesel fuel by 43%, and aviation fuel by 40%. According to calculations by the Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF), retail gasoline prices rose by 3.93% during the four weeks ending June 10. This was the fastest increase since May 2018, when gasoline prices climbed by more than 5% in a single month.
The Russian government is attempting to ease pressure on the fuel market through subsidies and regulatory concessions. In April and May, oil companies received 700 billion rubles in state subsidies. In June, they were also permitted to lower fuel quality standards and sell Euro-3 gasoline instead of Euro-5.
“The most alarming aspect is that the crisis is only beginning,” Kabakov said. “Seasonal demand traditionally peaks in August and September, yet signs of shortages and accelerating prices have already appeared in June. If the situation at the refineries does not stabilize, fuel prices could become one of the main drivers of inflation in the second half of the year.”
