Russian President Vladimir Putin admitted on Sunday, June 28, that Russia is struggling to keep fuel flowing to its own citizens, a rare public concession delivered at a congress of the ruling United Russia party and at a meeting with leaders of the country’s energy industry. Putin acknowledged the long lines at gas stations and said the right grade of gasoline was not always available, blaming the strain on a wave of Ukrainian drone strikes that have battered the refineries that turn crude oil into usable fuel.

The admission is striking because Russia is one of the largest oil exporters on earth. The country still has plenty of crude to pump and sell abroad. What it is losing is the ability to process that crude at home. Refineries are the plants that convert raw oil into gasoline, diesel and jet fuel, and Ukraine has spent months targeting them rather than the oil fields themselves. The result is a country swimming in crude oil that cannot make enough finished fuel for its own drivers, farmers and airlines.

The numbers behind the shortage are large. The International Energy Agency said this past week that the disruption is unprecedented in the history of the war, estimating that more than 20 percent of Russia’s total refining capacity has been knocked offline. More than two dozen strikes have hit Russian refineries since March, including eight of the country’s ten biggest plants. The Moscow Oil Refinery, operated by Gazprom Neft, normally supplies nearly half of the capital’s fuel and processed 11.6 million metric tons of crude in 2024; after being struck twice in mid-June, it may not return to service until 2027. The Kapotnya refinery, the largest supplier to the Moscow region, is expected to stay offline until at least the end of this year, and Lukoil’s NORSI plant, Russia’s fourth-largest refinery, went dark on June 24 after a drone strike.

Putin tried to play down the severity. Citing a report from Russia’s Energy Ministry, he said gasoline reserves stood at 1.7 million metric tons, roughly in line with the same period last year, and put the decline at only 4 percent. “Right now we’re observing a certain shortage, but it’s not critical,” he said. The picture on the ground looks harder. As of June 24, at least 55 of Russia’s 83 regions were reporting either government-ordered restrictions on gasoline and diesel sales or limits imposed by private fuel stations. Roughly ten regions have introduced rationing, often capping purchases at 30 to 40 liters per vehicle. In annexed Crimea, authorities declared an emergency situation and at one point halted public gasoline sales entirely.

The clearest sign of how tight supply has become is what Russia is now doing with its exports. Putin confirmed a temporary full ban on exports of gasoline and jet fuel and said a complete ban on diesel exports was under consideration. Alexander Novak, the deputy prime minister overseeing energy, has said Moscow is reviewing fuel export agreements so they do not compete with domestic needs. For an economy that depends heavily on energy revenue, halting the export of refined products is a costly move. It means giving up sales abroad to keep enough fuel at home, an open admission that the domestic market now comes first.

The business fallout reaches well beyond the gas pump. Putin singled out the farm sector, warning that the shortages threaten the summer harvest at the moment agricultural producers need diesel most. To close the gap, the government is weighing something almost unthinkable for a major oil power: importing fuel. Officials are looking at purchases from Turkey and other Asian suppliers, and the Russian parliament has approved subsidies for imported fuel along with temporary relief for refiners. Repairs will not come quickly because refineries rely on specialized Western equipment that sanctions have made difficult to replace.

The strikes are continuing even as Putin speaks. Overnight into Sunday, Ukrainian drones hit two more refineries, one in the Krasnodar region and another near Yaroslavl. The Slavyansk plant in Krasnodar, which processes close to 4 million tons of crude a year and feeds petroleum exports through Russia’s Black Sea ports, caught fire, and falling debris killed one person. Ukrainian President Volodymyr Zelensky described the attacks as part of an effort to weaken Russia’s ability to fund and wage the war.

Sergei Vakulenko, an energy analyst at the Carnegie Russia Eurasia Center, summed up the strain bluntly, writing that the Russian oil industry’s resilience is being stretched dangerously thin.

JBizNews Desk
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