Russia's Summer Fuel Crisis: What Putin Didn’t Mention
The lines are growing at Russian gas stations -- and so is the frustration and uncertainty as several months of Ukrainian attacks have set oil refineries ablaze and choked supplies for motorists across the vast country.Fuel rationing has been introduced in many regions, with hourslong queues of cars snaking beside roads. Social media videos show drivers aghast at the lines or swearing at empty gas pumps and rising prices. The mayor of the Siberian city of Irkutsk even ordered portable toilets brought in to accommodate those in line.The fuel crisis — unprecedented for a nation that is one of the world's biggest energy producers — has brought Moscow's full-scale invasion of Ukraine home to ordinary Russians like few other events in the war, now in its fifth year.It drew a rare admission from President Vladimir Putin, who acknowledged that “problems persist for both motorists and businesses,” and “there are still queues at petrol stations, and finding the right grade of petrol isn’t always easy.”Putin insisted the shortages are “not critical” and “temporary.” But that appeared to do little to reassure at least one motorist in Moscow, the wealthy capital typically better-insulated from economic shocks than the rest of the country.“I think the situation is not very good,” the motorist waiting in line told The Associated Press on Monday, the day after Putin's televised remarks.“They say one thing on television, and in reality it’s another. ... People are queueing everywhere,” he added, declining to identify himself out of concern for his safety.An AP count shows over 50 reported attacks by Ukraine on oil refineries, depots, terminals and other oil infrastructure in Russia and the illegally annexed Crimean Peninsula since late March. Often, the same facility is hit more than once -– such as the refinery in the Black Sea town of Tuapse, which was struck four times in just over two weeks.As a result, the amount of crude oil Russia processed into fuel in June was down 25% from a year ago, to 3.95 million barrels per day — the lowest level in over two decades, said Gary Peach, oil markets analyst at Energy Intelligence.“The outages are extraordinary,” he said.Gasoline production has fallen 17% to 850,000 barrels a day, from 1.03 million a day a year ago — far short of what’s needed for the domestic market. Russia exports relatively little gasoline.About a third of Russia's oil refining capacity is offline, said Chris Weafer, CEO of Macro-Advisory Ltd. Consultancy, noting that because refineries don't publicly confirm the extent of the damage, his estimate comes from anecdotal evidence and oil industry sources.“It comes at a very critical time for the Russian economy, in that the agriculture season, particularly the harvest season, is now starting to ratchet up,” increasing demand, Weafer said.Ukrainian officials describe the strikes as a campaign to pressure Moscow to end the war by undermining its military logistics and supply lines and weakening its ability to mount assaults along the front.In particular, Kyiv has sought to isolate Crimea, which was seized from Ukraine in 2014 in a move that most nations do not recognize. Attacks earlier this year forced the Moscow-installed authorities to enact fuel rationing on the peninsula in May and halt sales to civilians there altogether several weeks later. Limited sales later resumed in the city of Sevastopol.Ukraine has carried out major drone strikes on Russia’s two largest cities, embarrassing the Kremlin with images of black plumes of smoke that circulated widely online, despite regulations restricting their publication.A June 3 attack on an oil terminal in St. Petersburg darkened the sky as Putin prepared to host his annual economic forum to attract foreign investment. On June 18, a similar cloud rose from the Moscow Oil Refinery on the outskirts of the capital, sending greasy black droplets raining down.By late June, some form of gas rationing was reported in over half of Russia's regions. Some of them slapped strict limits on all gas stations; in others, gas station chains limited how much fuel could be bought.Popular ReadsOfficials blamed hoarding and panic-buying, urging motorists to fill their tanks only when needed.Exports of gasoline and aviation fuel have been restricted, and authorities weighed banning diesel fuel exports, too.Importing fuel was being considered, with Kremlin spokesman Dmitry Peskov saying contacts with some countries were “underway.” He described the move as “another step toward stabilizing the market and aimed at reducing panic-buying.”The shortages have reached distant Russian regions where no refineries have been hit by Ukraine's drones.Viktor Shkurenko, who owns retail stores in the Omsk region and other businesses, called announcement on limits on gasoline sales there to 40 liters (10.5 gallons) per vehicle “unexpected.” “Nothing was bombed here. We have the biggest oil refinery in Siberia right here, and it gave us confidence that this fuel crisis won’t come to us,” he said, expressing worry about how limits could affect his businesses. As of Saturday, however, he said his company has not had any problems refueling its vehicles.In the Siberian region of Zabayakalye, east of Lake Baikal, media reports said a garbage hauler suspended pickups and some bus services were curtailed.In addition to ordering portable toilets outside gas stations, the city of Irkutsk raised public transport fares as of Wednesday, citing rising fuel costs.Pavel Kharitonenko, acting head of the Irkutsk branch of the opposition Yabloko party, told AP he now finds it easier to walk or use public transport.“I don't have the fuel, and I don't want to queue at gas stations,” he said. The Irkutsk region, home to a Rosneft oil refinery, has experienced acute shortages for several days, with lines growing, Kharitonenko said.Putin said Russia's stockpiles of gasoline are only 4% lower than what it had last year. Weafer, the analyst, says that "reportedly, there are good supplies of fuel around the country. The problem is it’s in the wrong place." Supplies need to be reallocated to regions experiencing shortages, and in a big country like Russia, “it's not something that can be done overnight," Weafer said. “There should be enough, but it will take several weeks to get it from where it is to where it’s needed,” he says. “It’s just a huge logistics operation to do that.”Fixing the war-damaged refineries is complicated. Ukraine's attacks damaged specialized equipment that is often sourced abroad, making repairs time-consuming and expensive as workarounds or replacements are sought by evading sanctions. “They manage to get these things up and running, not necessarily at full capacity,” Peach said. “But the extent of the damage this time is so extensive that they won’t get back to winter levels of refining this summer.”Some refineries won't be worth repairing until there’s a ceasefire or armistice, he said, because they will just "get knocked down again.” Repairing the Moscow Oil Refinery, which supplied 40% of the fuel to the capital and the surrounding region, is expected to take at least three months, Weafer said. If there's no further damage to Russia's oil infrastructure, he estimated the shortages will last “probably throughout the summer" because demand from agriculture will likely remain high into September. —— Associated Press writers David McHugh in Frankfurt, Germany, and Hanna Arhirova in Kyiv, Ukraine, contributed.
