Parts of Russia face gasoline shortages after Ukraine struck refineries

Russian regions and occupied Ukrainian territories are experiencing gasoline shortages, primarily driven by recent Ukrainian drone attacks on key refineries, including Novokuibyshevsk and Ryazan, compounded by seasonal demand surges, logistical bottlenecks, and ongoing refinery maintenance. Despite a July 28 gasoline export ban, Russian officials acknowledge the persistent supply issues, with some indicating the problem could last for weeks and only fully resolve with the end of the conflict, signaling a significant domestic energy supply disruption.

Analysis

Russia is experiencing significant domestic gasoline shortages across several regions and in occupied Ukrainian territories, a direct consequence of escalating Ukrainian attacks on key Russian oil refineries, including Novokuibyshevsk, Syzran, and Ryazan. This disruption to refining capacity is being compounded by a seasonal surge in fuel demand from summer travel and grain harvesting, pre-existing logistical bottlenecks, and ongoing refinery maintenance. Despite a gasoline export ban implemented by Moscow on July 28 to secure domestic supply, market participants report it is insufficient to avert a fuel crunch. The severity of the situation is corroborated by officials in Russian-controlled territories; the head of Crimea acknowledged the problem could persist for another month and would likely not be fully resolved until the end of the conflict, signaling a protracted and systemic vulnerability in Russia's domestic energy supply chain.

Key Decisions for Investors

• Monitor global gasoline and diesel crack spreads for potential upward pressure, as the disruption to Russia's refining capacity is likely to reduce its refined product exports and tighten the international market.
• Re-evaluate any direct or indirect exposure to the Russian energy sector, as successful and repeated strikes on refineries highlight a significant and escalating risk to its core infrastructure and production capabilities.
• Factor in heightened geopolitical risk and potential energy price volatility, as official Russian acknowledgments suggest these fuel shortages are a systemic issue with no short-term resolution, potentially impacting the duration and economic cost of the conflict.