moscow —
Nearly all of Russia’s 83 regions are experiencing gasoline shortages or reporting supply disruptions, according to a CNN analysis, with many gas stations imposing rationing as the Russian government scrambles to stay ahead of a ferocious campaign of Ukrainian drone strikes targeting refineries.
The fuel crisis first intensified in Russian-controlled Crimea, leading to a state of emergency and a total ban on fuel sales to civilians on June 21, but has now spread across Russia’s 11 time zones.
CNN analyzed public statements from local mayors and governors, as well as national and local media coverage, and found that more than 50 internationally recognized regions have publicly reported supply problems, and nearly all have reported disruptions informally. At least three regions, including Irkutsk and the Zabaikal region in eastern Russia, have declared a state of “high alert,” one level below the state of emergency.
Russian President Vladimir Putin insisted in a long interview on state television on Sunday that “there is currently a certain shortage, although it is not a crisis.” This was part of a PR operation that appeared to have been hastily arranged to reassure the public that everything was under control.
Perhaps less sobering was his comment that the most urgent task was to “quickly and significantly increase the production of air defense systems,” a clear sign of Russia’s increasing vulnerability to an attack on Ukraine.
This is not the first time Russia has experienced widespread fuel shortages. Last August, an increase in attacks on Ukraine affected supplies across multiple regions, but experts say the current situation is even worse.
“The main difference is the scale and persistence of the attack,” said Sumit Ritoria, principal analyst for supply and modeling coordination at commodity intelligence firm Kpler. Another factor is ongoing restoration work following last year’s campaign.
Litria estimates that Russia’s gasoline production is currently about 20% below domestic demand due to the Ukraine strike, and that refinery utilization rates (how much crude oil refineries are processing) are at multi-year lows.
“The balance is shifting in this competition between repairers and attackers,” said Sergei Vakulenko, who has worked in Russia’s oil and gas industry for 25 years and is a senior fellow at the Carnegie Russia and Eurasia Center, a Berlin-based think tank. He noted that Ukraine has not only increased the frequency of attacks in recent weeks, but also increased the number of drones used. “The resilience of Russia’s oil industry is becoming dangerously weak,” he wrote in a recent article.
The resilience of the Russian people is also now being tested. Gas stations across Russia have imposed limits on purchases, and fuel-tracking websites have sprung up to guide drivers to the best spots to refuel, according to a CNN analysis. The tension builds as the line of cars grows longer.
A video posted on social media last week shows two women in Moscow getting into a profane argument over their turn. “It’s first come, first served,” one woman yelled, calling another “stupid.”
In Krasnodar, a city in southern Russia that borders Crimea, another video shows a man filling a container with water in the back of his car while two women chastise him for violating rules. Many regions in Russia have banned the use of large canisters that hold about 5 gallons to prevent fuel hoarding.
It is impossible to gauge the level of public anxiety, but President Putin himself was so concerned that he warned in a state media interview on Sunday that the attack was aimed at “bringing us uncertainty, or even better, creating division in Russian society.”
Authorities must also crack down on those who seek to profit from the crisis. Police in the Siberian city of Irkutsk on Monday fined four people for reselling gasoline at inflated prices on the black market, according to the region’s Interior Ministry. In one case, a 20-year-old man was caught in a sting by anti-corruption agents posing as a buyer. It is suspected that the fuel was being sold at about four times the national average price.
The governor of Irkutsk, one of the worst-hit regions, has put the virus on “high alert” to stabilize the situation, banning the sale of canisters to anyone other than emergency workers.
“This is kind of a double-edged sword. It not only hits the public mood, but it also hits inflation,” Alexander Kolyandr, a senior fellow at the Center for European Policy Analysis, said of the fuel shortage.
Russian media reported people waiting in lines for up to 18 hours at pumps, and internet memes emerged, including one showing people setting up tables with drinks and shisha pipes next to parked cars.
In Moscow, there have also been unusual scenes of cars and trucks lining up outside gas stations, with some drivers waiting for hours with no guarantee of refueling.
Anxiety is rising in the Russian capital following a June 18 drone attack by Ukraine. This was the largest attack since the start of Russia’s full-scale invasion, and the second to target Moscow’s Kaportnya refinery in less than a week. One interception attempt caused a massive explosion that blew off the roof of a fuel tank.
On June 23, an employee at a gas station in central Moscow told CNN that tankers were still arriving on schedule and delivering fuel. She said the “hustle and bustle” at petrol stations and service station queues was “absolutely pointless” and blamed panic buying for increased queues.
But Carnegie’s Vakulenko believes Moscow’s supply problems are real, thanks not only to the June attack but also to multiple attacks on refineries in the surrounding region that supply the capital.
Kpler’s Litoria said the disruption was “occurring at the beginning of the high demand season” in the country, and typically lasts until September, when children return to school.
Over the past week, motorists in Moscow told CNN they have been driving for gas, sometimes for days at a time. A 27-year-old female driver, who did not want to give her name, said she had been waiting in line for two hours at a gas station on Monday. She asked the cashier if they were rationing sales and was told it was confidential information, but the cashier revealed that each gas station makes its own decisions.
“I sincerely hope that the situation will change for the better and that everything will end. I was planning to travel to Russia this summer and I need to drive to my grandmother’s house. I sincerely hope that the situation will stabilize,” she said.
Leningrad Governor Alexander Drozdenko summarized the situation succinctly on his Telegram channel, writing: “There is no need to panic. There is no need to be too optimistic.”
Russia still has the means to deal with the crisis, but experts told CNN that its options are narrowing.
On Sunday, Putin listed the measures his government is implementing, from shortening planned maintenance schedules for refineries to considering a ban on diesel exports and increasing imports. Reuters reported on Wednesday, citing two sources, that Russia has started buying gasoline from India. This was a surprising turn of events for India’s worn-out system of refiners supplying Russian crude to global markets amid international sanctions.
Russia may also consider allowing lower-quality gasoline to enter the market to boost supplies, economic newspaper Kommersant reported this week, a move that carries risks for users. “New cars don’t like bad gas, so no matter how you look at it, it’s the people who are paying the price,” said analyst Coliandre.
Messaging is also important given the impact of panic buying. If governments can stabilize supplies and calm the public, there could be a “normalization” where people realize the shortages are not as bad as feared and cut back on purchases, said Janis Kluge, a senior researcher at the German Institute for International and Security Affairs.
Deputy Prime Minister Alexander Novak claimed on Wednesday that the Russian market is “fully supplied” with both diesel and gasoline.
But if Ukraine’s attacks continue at their current pace, that normalization may not happen. And the economic risks of higher inflation and lower consumption due to fuel shortages could not have come at a worse time.
Oil prices, which soared during the first months of the U.S.-Israel-Iran war, are now falling, closing the window for Russia to use increased export profits to narrow its growing budget deficit. And even as defense spending continues to rise, Russia’s economy is already stagnant.
Russia’s central bank cut its high-interest rate by just a quarter of a point at Wednesday’s rate-setting meeting, saying inflationary pressures were rising again due to a “temporary reduction in motor fuel production.”
Still, President Putin has reiterated this week his extremist claims to both Ukraine’s Donbass region and “Novorossia” (Ukraine’s term for Zaporizhzhya and Kherson regions), and Kolyandr believes the most likely short-term outcome is military escalation.
“From the Ukrainian side, it makes sense to escalate, because the strategy works. And from the Russian side, the sooner we escalate, the sooner we might be able to solve the problem, because funds are running out and perhaps the public’s patience is running out.”
