Almost every Russian region hit by fuel crisis, as Ukraine escalates drone attacks

Almost all of Russia’s 83 regions are seeing gasoline shortages or reported disruptions to supply, according to a CNN analysis, with many gas stations imposing rationing as the Russian government races to get ahead of a ferocious campaign of Ukrainian drone attacks targeting its refineries.

The fuel crisis, which escalated first in Russian-controlled Crimea and prompted a state of emergency and a full ban on fuel sales to ordinary people on June 21, is now reaching across Russia’s 11 time zones.

CNN analyzed official statements from regional mayors and governors as well as national and local media reports and found more than 50 of its internationally recognized regions officially reporting supply problems, with unofficial reports of disruptions in almost all of them. At least three regions, including Irkutsk and the Transbaikal region in eastern Russia, have declared a “state of heightened alert,” one step below a state of emergency.

“We are currently seeing certain shortages, although they are not critical,” claimed Russian President Vladimir Putin in a lengthy state TV interview on Sunday – part of what seemed to be a hastily arranged PR blitz designed to reassure the population that everything was under control.

Less soothing perhaps was his comment that the most urgent task was “to rapidly and significantly increase production of the air defense systems,” a clear signal of Russia’s growing vulnerability to Ukrainian strikes.

This isn’t the first time Russia has seen widespread fuel shortages. Last August, an uptick in Ukrainian attacks affected supplies across multiple regions – but experts say the situation now is much worse.

“The key difference is the scale and persistence of the attacks,” said Sumit Ritolia, lead analyst for refining supply and modeling at Kpler, a commodities intelligence firm. Another factor is the ongoing repair work following last year’s campaign, he said.

Ritolia estimates Russian gasoline production is currently running at around 20% below domestic demand because of the Ukrainian strikes, with refinery runs (the amount of crude oil refineries are processing) at multi-year lows.

“In this race between the repairers and the attackers the balance is shifting,” said Sergey Vakulenko, who spent 25 years in the Russian oil and gas industry and is a senior fellow at the Berlin-based Carnegie Russia Eurasia Center think tank. He noted that Ukraine had not only increased the frequency of attacks in recent weeks, but also the number of drones used. “The Russian oil industry’s resilience is being stretched dangerously thin,” he wrote in a recent article.

The resilience of the Russian people is now also being tested. Gas stations across Russia are imposing limits on purchases, CNN’s analysis found, with fuel- tracking websites popping up to guide drivers to the best spots to fill up. As the lines of cars grow longer, tensions are rising.

One video posted on social media in the past week shows two women in Moscow engaged in a profanity-laced argument over their places in line. “It’s a first-come, first-served line,” one woman screams, calling the other a “moron.”

In the southern Russian city of Krasnodar, which borders Crimea, another video shows a man filling up a container in the back of his car while two women berate him for breaking the rules. A number of Russian regions have banned the use of large canisters that hold around five gallons to prevent fuel hoarding.

Signs reading "No" placed on fuel pump nozzles at a gas station after local authorities restricted sales and introduced rationing in the Black Sea resort city of Yevpatoriya, Crimea, on June 11. Alexey Pavlishak/Reuters

Measuring the extent of the public unrest is impossible, but Putin himself was concerned enough to warn in his interview on state media Sunday that the strikes were designed to “create uncertainty for us, or even better to lead to a schism in Russian society.”

Authorities are also having to crack down on those hoping to profit from the crisis. In the Siberian city of Irkutsk, police fined four people on Monday, accusing them of reselling gas on the black market at inflated prices, according to the region’s Interior Ministry. In one case, a 20-year-old man was caught in a sting operation after anti-corruption officers turned up posing as buyers. He was allegedly selling the fuel at around four times the national average price.

The governor of Irkutsk, one of the worst-affected regions, imposed a “state of heightened alert” to stabilize the situation, and banned sales in canisters to anyone except emergency services.

“It’s kind of a double-edged sword. It hits the public mood, and it also hits inflation,” said Alexander Kolyandr, senior fellow at the Center for European Policy Analysis, of the fuel shortages.

Russian media have reported that people are waiting up to 18 hours in lines at the pump, with internet memes popping up, one showing people setting up tables with drinks and shisha pipes next to their stationary cars.

Even in Moscow, extraordinary scenes are emerging of cars and trucks lining up outside gas stations, with some drivers waiting for hours with no guarantee of being able to fill up.

Anxiety in the Russian capital is high following Ukraine’s June 18 drone attack, the largest since the start of Russia’s full-scale invasion, and the second targeting Moscow’s Kapotnya refinery in less than a week. One interception attempt resulted in a large explosion that spectacularly blew the roof off a fuel tank.

People walk in a park as black smoke rises from the area of the Russian oil producer Gazprom Neft's Moscow oil refinery on the south-eastern outskirts of Moscow on June 18. AFP/Getty Images

On June 23, an attendant at a gas station in the center of Moscow told CNN that tankers were still arriving and delivering fuel according to schedule. She described the “fuss” at gas stations and lines as “completely pointless,” attributing the growing lines to panic-buying.

But Vakulenko of Carnegie believes supply problems in Moscow are real, thanks not only to the June attacks but multiple strikes on refineries in the surrounding regions that supply the capital.

Kpler’s Ritolia says the disruptions are “occurring at the start of the high-demand season” in the country, which typically lasts until September when children go back to school.

Over the past week or so, drivers in Moscow have told CNN they’ve been driving around for days in some cases in search of gasoline. One 27-year-old female driver – who didn’t want to share her name - said Monday that she had been waiting in line for two hours at one gas station. She asked the cashier if they were rationing sales and was told that was confidential information, before the cashier divulged that each individual gas station was deciding this itself.

“I really hope it will change for the better and all of this will end. I was planning to travel around Russia this summer, I need to drive to my grandmother’s. I really hope the situation will stabilize,” she said.

The governor of Leningrad region, Alexander Drozdenko, summed up the situation neatly on his Telegram channel, writing: “No need for panic. Or for too much optimism.”

Russia still has tools to deal with this crisis, but experts tell CNN those options are narrowing.

On Sunday, Putin listed measures the government was undertaking, ranging from shortening planned maintenance schedules at refineries, to considering a ban on diesel exports, and increasing imports. Reuters reported Wednesday, citing two sources, that Russia had started buying gasoline from India, a jarring twist in a now well-worn system of Indian refiners providing a release valve for Russian crude onto global markets amid international sanctions.

Vehicles wait to refuel as local officials say some regional filling stations face shortages due to production cuts at major refineries, in Rostov-on-Don, Russia, June 23. Sergey Pivovarov/Reuters

Russia may also be considering allowing lower-quality gasoline onto the market to increase supplies, business daily Kommersant reported this week, a move that carries risks for users. “New cars do not like bad quality gasoline,” said analyst Kolyandr, “so from wherever you look at that, it’s the population that pays the price.”

Messaging is also critical, given the impact of panic-buying. If the government can stabilize supplies and calm the population, there may be a “normalization” where people realize the shortages are not as bad as feared, and scale back purchases, said Janis Kluge, a senior associate at the German Institute for International and Security Affairs.

Deputy Prime Minister Alexander Novak claimed Wednesday 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 materialize. And the economic risks of higher inflation and lower consumption as a result of the fuel shortages could not have come at a worse time.

Oil prices, which skyrocketed for the first few months of the US-Israeli war with Iran, are now coming back down, closing a window of opportunity for Russia to use higher profits on its exports to close its widening budget deficit. And the Russian economy is already stagnating, even as defense spending continues to rise.

At its rate-setting meeting on Wednesday, Russia’s central bank cut sky-high interest rates by only a quarter of a percentage point, saying that inflationary pressures were again rising thanks in part to “a temporary contraction in motor fuel production.”

And yet, with Putin this week reiterating his maximalist claim to both the Donbas region of Ukraine and “Novorossiya” (a term he uses to refer to Ukraine’s Zaporizhzhia and Kherson regions), Kolyandr believes the most likely near-term outcome is military escalation.

“From the Ukrainian side it makes all the sense to escalate, you know, because the strategy works, and on the Russian side the sooner they escalate, the sooner they… might resolve the issue, because money is running out, and public patience is probably running out.”