Ukrainian drone attacks on Russian oil refineries add to all these issues and are disrupting Russia’s fuel supply chain, worsening fuel shortages within the country. Ever since early August, Ukraine has prioritized striking contested key refinery assets. This includes distillation columns — key components in breaking crude oil into its different petroleum products, such as gasoline and diesel. This smart sabotage seeks to blunt Russia’s capacity to refine petroleum for both its own needs and its foreign customers.
Between August 2, when the first strike occurred, and August 24, Ukraine carried out at least twelve strikes on Russian oil infrastructure. As a result of these strikes, fuel shortfalls are being reported across several areas. This is particularly the case in the Far East and the Crimean Peninsula. Perhaps most pressing, motorists in these communities are dealing with significant frustration as long lines have formed at gas stations. Many places have run out of fuel entirely. In a move reflecting the urgent nature of this crisis, officials have been forced to begin rationing fuel or stopping sales entirely.
What once was a serious but localized issue has suddenly exploded onto the national stage. Oil company managers have been called to government meetings on two occasions to address the persistent shortages. Independent data released recently show gasoline production in Russia down 8.6% in the first 19 days of August versus the same period a year ago. At the same time, diesel production plummeted even further — down 10.3%. To relieve some of the pressure during the worst of the crisis, Russia stopped exporting gasoline on July 28.
Sergey Vakulenko, a senior fellow at Russia’s Carnegie Russia Eurasia Center adds that the sought-after regions are strategically important. He noted the impact of Ukrainian attacks on a chain of refineries. This line stretches from Ryazan, just south of Moscow, and all the way to Volgograd. This space is incredibly busy! It is one of the most important routes for travelers going to the region’s popular Black Sea resorts and as a base for agricultural harvest operations.
“The Ukrainians are attacking an arc of refineries, starting from Ryazan, which is south of Moscow, all the way to Volgograd. That region is where people are driving through on their way to (resorts on) the Black Sea. That’s the region where most of the harvest operations are going on. And that’s also a rather densely populated region,” – Sergey Vakulenko
The consequences of these attacks reach far past short-term fuel scarcity. As Russian media outlets report on the crisis, concerns are growing over increased transportation difficulties and economic consequences tied to rising fuel prices. The strikes have so far focused on critical refinery infrastructure, forcing production capabilities to a standstill and raising concerns of future disruptions.
Gary Peach, our resident expert on energy markets, had a lot to say. Lastly, Reid commented on the toll these attacks might take on Russia’s gasoline sector, particularly in the summer months when consumption is at its highest. That mixture of decreased supply and increased demand has suddenly produced the right conditions for fuel shortages.
“That’s just enough to make their gasoline industry feel some pain, especially during the high consumption months in the summer,” – Gary Peach
Even though the situation is dire now, according to some experts, things are looking up come the end of September. But as demand drops and annual summer maintenance at many refineries wraps up, fuel production should return to normal. But this forecast rests on two unknowns— how far Ukraine can carry the offensive with its own strikes, and how well Russia can reposition to meet the emerging threat.
