Russia's Fuel Crisis Deepens: Moscow Bans Diesel Exports and Seeks to Import Gasoline

Crimea as the Starting Point of the Crisis

The crisis had its starting point on the Crimean peninsula, annexed in 2014, where kilometers-long lines formed at gas stations. According to Russian authorities, the shortage has since spread to nearly all regions of the country. Many gas stations are completely out of fuel, while others dispense only limited quantities. In the Volgograd region, one driver reportedly even set up a small tent camp in front of a pump to secure his place in the line. Images and videos of those waiting are spreading rapidly on social networks.

Putin Acknowledges Shortages

Vladimir Putin publicly acknowledged the supply problems about a week ago. At a crisis meeting with oil producers, he said: "There are lines at the gas stations, the required grades of gasoline are not always in stock" and "We all here understand that this task is impossible to fulfill." At the same time, he described the situation as a temporary "certain deficit" and stressed that Russia's energy sector has one of the largest safety buffers in the world. Putin ordered oil companies to no longer withhold their surpluses for their own gas station chains but to release them to independent suppliers.

Ukrainian Drones as the Main Cause

The main cause is considered to be Ukrainian drone attacks on Russian refineries, oil depots, and tankers in the Sea of Azov, which have significantly reduced processing capacities. According to Vasily Astrov, Russia expert at the Vienna Institute for International Economic Studies, refinery capacities are already restricted by up to 50 percent. "That is of course not optimal, but it is the only short-term solution for Moscow. Refinery capacities are already very heavily restricted, by up to 50 percent," Astrov told the newspaper KURIER. The government also points to the beginning of the harvest season and seasonally higher demand.

To stabilize domestic production, planned maintenance work at refineries is to be postponed to a later date. At a convened meeting on the situation in the energy sector, Novak spoke of a "tense market situation." At the same time, he rejected accusations that Ukrainian attacks are intended to deliberately damage the Russian economy – that thesis was instead advanced by Putin himself, who accused Kyiv of trying to create nervousness in the country through attacks on the energy infrastructure.

Consequences for Europe and Austria

The turnaround on the world market has far-reaching consequences. Until the start of the EU embargo in early 2023, Europe had imported diesel from Russia on a large scale; Germany alone covered 40 percent of its diesel imports from Russia. After the embargo, Moscow redirected its exports to Turkey, Brazil, North and West African states, and the Middle East. Now Russia, which counts among the world's largest oil producers, is itself becoming an importer.

Rationing and Everyday Life for the Population

According to Vienna expert Astrov, the impact on Europe is likely to be limited. Austria has not imported diesel directly from Russia for quite some time; Astrov expects that domestic fuel prices will be more strongly influenced by developments in the Persian Gulf and the Strait of Hormuz than by the situation in Russia. On European trading venues such as Rotterdam, however, diesel prices and margins have risen sharply in the short term, even though the crude oil price has eased slightly despite the renewed escalation in the Gulf. The markets are betting that negotiations between Washington and Tehran will soon resume.

For many Russians, the situation has meanwhile become everyday life. In numerous regions, sales are being rationed, and drivers are only allowed to fill up limited amounts. The government is seeking to ease the crisis through imports and organizational measures – but pressure on the system remains high as long as attacks on energy infrastructure continue and refinery capacities remain restricted.