Tanking it

In the early hours of 5 September, footage of a Rosneft refinery on fire in the central Russian city of Ryazan appeared on social media. Several Ukrainian drones had struck the plant, one of Russia’s largest oil refineries, which processed over 13 million tonnes of crude oil last year. The Armed Forces of Ukraine (AFU) had clearly intended to disable the refinery, which is located just over 450 kilometres from the Ukrainian border.

The attack was actually the fifth of its kind on the refinery this year, with the facility forced to stand idle for most of February and March due to earlier Ukrainian drone strikes. Novaya Europe has calculated that drones have struck Russian oil refineries 40 times so far this year alone, with the AFU achieving its goal of partially shutting down refineries or stopping fuel production completely in 25 of those attacks.

The current fuel crisis is both the longest since the war began and the longest for many years. It began in July and industry traders have told Novaya Europe they expect it to last until at least the onset of winter, and potentially even into 2026.

This year has seen two waves of Ukrainian drone strikes on Russian refineries: the first began in January and went on until mid-March, while the second wave began in early August and is ongoing. The hiatus between the two was brought about by a 30-day moratorium on striking enemy energy infrastructure that was agreed to by both sides. Although the moratorium ended at the end of April, the AFU refrained from attacking Russian refineries for a whole three months after that.

Novaya Europe calculated that five plants have faced total shutdown, three of which belong to Rosneft, one to Lukoil, another Russian energy giant, while the fifth, the Afipsky refinery, is not owned by any of Russia’s major oil companies. Factoring in the two strikes on the Ryazan oil refinery, which is currently operating at half of its previous level, Ukrainian drones have knocked out approximately 17% of Russian oil refining capacity since the beginning of August, according to calculations by Reuters and Novaya Europe.

That is the equivalent of the market losing approximately 17,700 tonnes of gasoline and 35,100 tonnes of diesel every day. That figure doesn’t include the 3,800 tonnes of gasoline and 8,200 tonnes of diesel that the Afipsky plant would have produced every day as it solely produces fuel for export, so its shutdown did not affect the domestic market.

Protracted crisis

The gasoline crisis in Russia is usually seasonal. Shortages and an accompanying price hike normally take place at the end of spring, continue through the summer when demand is at its peak, and then ebb away again in the autumn. 

But this year’s crisis will be longer than usual, traders and analysts told Novaya Europe. On top of the drone strikes, several refineries were scheduled to close for regular maintenance this year as it was.

Furthermore, the owners of smaller, independent gas stations, which account for about 40% of fuel sales in Russia, were unable to secure an adequate supply of fuel in the spring, as they usually do, due to high Central Bank interest rates on borrowing, making it prohibitively expensive to take out loans.

Due to the crisis, the average price of gasoline increased 7.2% from 1 January to 8 September, while inflation for the same period was 4%. The refinery strikes have also reduced oil companies’ export revenues, for example, in August, diesel exports were down 22.5% compared to January.

Traders say gas stations will suffer shortages until mid-winter, if not longer. “Demand will remain high for the next five months,” one said. “The situation will remain a mess! There’s not enough fuel, and especially not enough gasoline,” one trader working in Siberia told Novaya Europe. He said that he feared the onset of cold weather could coincide with shortages in diesel supplies for the winter, adding that “if it weren’t for the drones, I think things would be a lot easier.”

What is to be done?

The Russian authorities have two strategies to ensure that shortages and rising prices don’t impact the market — one short-term, the other systemic.

The short-term measure, banning the export of gasoline until the end of October, is not working, according to market players who spoke to Novaya Europe. The systemic second measure is refining Russian oil in Belarus, which has surplus refining capacities, and Belarus then supplying Russia with oil products. 

There has not yet been any official confirmation that such an agreement has been reached with Minsk, but one oil-market analyst told Novaya Europe he was sure that the Russian market would start “receiving more gasoline from Belarus in the very near future”.

This, combined with the completion of planned maintenance work and the end of peak summer demand, could ease the deficit and price rises, but only until the next seasonal crisis and a fresh wave of attacks.

To solve the problem systemically, there are two options: either end the war in Ukraine or abandon the current market model whereby the state regulates fuel prices. According to oil-market analyst Kirill Rodionov, the only solution is to ensure that Russia’s refinery infrastructure is safe and that the West’s sanctions on the import of oil refining equipment will be lifted. Sanctions also delay repairs and lead to price increases.

Since 2019, the Russian authorities have attempted to keep a lid on prices by making so-called dampener payments to oil companies to encourage them to sell their product on the domestic market instead of exporting it for a higher price. In the first eight months of 2025, these subsidies halved compared to the same period in 2024, which is why oil companies have raised prices.

The current crisis shows that dampener payments don’t work, according to Carnegie Russia Eurasia Centre expert Sergey Vakulenko. “They work short-term. But in the longer term, it turns out the problems they solved … were insignificant, yet the distortions they cause grow and cost the economy more and more,” he explains.

According to various traders who spoke to Novaya Gazeta Europe, abandoning such payments wouldn’t drive up prices if the authorities also increased mandatory fuel sales on the stock exchange, where independent gas station networks could buy it. 

Rodionov says that the minimum volume of such sales should be increased from the current 15% to 50% for gasoline and from 16% to 33% for diesel. This would make fuel more affordable, as well as make it more difficult for gas station owners to raise prices, Rodionov adds. The only obstacle to such a move is the lobbying power of oil companies, for whom it makes more sense to sell fuel directly on the global or domestic market themselves.