Russia is grappling with a deepening fuel crisis, prompting authorities in Moscow to impose limits on gasoline sales and urgently procure fuel from Belarus. These developments, reported by Ukraine's Foreign Intelligence Service on the evening of Thursday, August 21, signal a rapid exacerbation of fuel shortages that have begun to spread across Russian regions.

The crisis has extended to the Kuril Islands, where gasoline sales have been restricted to no more than 10 liters per person since August 20. These limitations follow deficits that previously affected Crimea, Transbaikalia, and Primorye. Currently, fuel supplies are prioritized for Russian special services, emergency services, and enterprises, leaving ordinary citizens facing increasing hardship. The crisis has been further compounded by recent drone attacks on Russian energy infrastructure, including the strike on the Novoshakhtinsk oil refinery in the Rostov region on the night of August 21, which sparked a fire.

This crisis is not merely a logistical challenge; it is a potent indicator of the escalating economic and geopolitical pressures facing Russia, with direct ramifications for consumers and businesses. The increasing reliance on Belarus for fuel supplies highlights vulnerabilities in Russia's supply chain and its capacity to meet domestic demand.

Market Signals

Soaring Gasoline Prices: Wholesale gasoline sales in Russia have hit record highs. AI-95 gasoline prices have surged by 55% since the beginning of the year, reaching 82,300 rubles (approximately $1023 USD) per ton by mid-August.
Export Restrictions: Russia imposed a complete ban on gasoline exports until the end of August, later extending it until the end of September, in a desperate attempt to stabilize the domestic market.
Reduced Refining Capacity: Ukrainian drone attacks have damaged or halted operations at key Russian oil refineries such as Ryazan, Novokuibyshevsk, and Saratov, reducing refining capacity by 10-14%.
Growing Dependence on Belarus: The shortage has led to a significant increase in interest from Russian companies in Belarusian petroleum products in the second half of August, underscoring the urgent need for imports.
Global Impact: While the volume of Russian gasoline exports is relatively small (less than 2% of global trade), these restrictions could impact global prices and supply chains, especially for countries heavily reliant on Russian fuel, such as Turkey.

Winners & Losers

Winners: Belarusian oil refineries (increased revenue through higher supplies to Russia), transport companies (increased demand for fuel logistics services).Losers: Russian consumers (facing higher prices and sales limits), Russian oil refining companies (affected by attacks and reduced output), international importers (may face higher prices and supply restrictions).

Action Timeline

Immediate: Companies reliant on Russian or CIS fuel should assess their supply chain resilience and closely monitor the Russian domestic fuel market for further restrictions.
Short-term: Explore alternative fuel sources and diversify supplies. Evaluate potential investment opportunities in Belarusian energy logistics.
Long-term: Re-evaluate geopolitical energy risks and consider strategic shifts in energy procurement.

Risk Assessment

Regulatory Risks: Potential for further export restrictions or internal quotas.
Market Volatility Factors: Continued sharp fluctuations in fuel prices affecting operational costs and profitability.
Geopolitical Tensions: The ongoing conflict and sanctions create high uncertainty in energy markets.
Single-Source Dependence Risks: Increasing reliance on Belarus could create new vulnerabilities in Russia's supply chain.
Environmental Risks: The use of older 'shadow' tankers for transporting Russian oil and petroleum products carries increased environmental hazards.

Key Indicators

Wholesale gasoline (AI-95) prices in Russia.
Russian refinery output levels.
Volume of Belarusian fuel exports to Russia.
Frequency and impact of drone attacks on Russian energy infrastructure.

Regional Perspective

Moscow's direct limits on gasoline sales and emergency fuel imports from Belarus underscore the severity of the crisis and its immediate localized impact on Russian citizens. These steps also highlight Belarus's growing strategic role as a crucial, albeit temporary, lifeline for Russia's embattled energy sector. The expansion of the crisis from peripheral regions to the capital indicates that the problem has become systemic and requires urgent solutions.

Immediate Implications

Gasoline prices in Russia are expected to continue rising until September, especially in logistically challenging regions.
Potential for further Russian export restrictions to ensure domestic supply.
Increased strategic importance and economic benefit for Belarus as a result of this crisis.
Continued Ukrainian attacks on Russian energy infrastructure, exacerbating shortages.

What to Watch

Russian government statements regarding fuel policy, including quotas and export bans.
Reports on the operational status of affected refineries.
Fuel import data from Belarus.
Geopolitical developments affecting energy infrastructure.

Analysis

Russia's deepening fuel crisis is a direct consequence of military actions and sanctions, forcing the country to divert resources and rely on allies. It signals growing internal economic strain and vulnerabilities in critical infrastructure, with ripple effects for regional and potentially global energy markets. The time-sensitive nature of this crisis demands immediate assessment by businesses and investors, as it can significantly impact supply chains and operating costs.