Russia’s Crude Surge Masks Fuel Crisis

Ukraine’s drone campaign has knocked out more than a fifth of Russia’s oil refining capacity, leaving fuel shortages across 55 of Russia’s 83 regions. At the same time, crude oil loadings at Russia’s western ports are heading for a record June, at roughly 2.7–2.8 million barrels per day. More oil is leaving Russia than ever, while Russians queue for petrol.

The contradiction makes sense once you look at the refinery, not the oil well. A refinery turns crude into the fuels people actually use: petrol, diesel and jet fuel. Ukraine is not trying to stop Russia pumping oil out of the ground. It is targeting the industrial link that makes that oil useful at home. Crude that can no longer be processed domestically is pushed towards export terminals instead, which is why seaborne shipments are rising while filling stations run short (Tagesspiegel).

The Moscow refinery gives a sense of the scale. It processed roughly 11.6 million tonnes of crude in 2024 and is now expected to be offline for months (Focus). When a plant of that size goes dark, petrol and diesel disappear from the domestic market together. Petrol output across Russia has fallen to about 90,000 tonnes per day, roughly a quarter below the June daily average. The quality of what Russia can still produce is also slipping. Polish sources report an emergency downgrade from Euro 5 to Euro 3 fuel standards, meaning dirtier fuel with higher sulphur content, because high-specification production can no longer meet demand (Business Insider Polska, Money.pl).

Who Pays Inside Russia

Russian consumers and farmers are paying first. Crimea halted fuel sales to individuals on 21 June. In Irkutsk, authorities imposed litre caps per vehicle, banned jerrycan purchases and gave priority to emergency services and agriculture (Devdiscourse/Reuters). Putin has acknowledged the need to secure fuel before the harvest (Rzeczpospolita). Tatarstan’s agriculture minister has told farmers to hold ten days to two weeks of reserves (The Moscow Times).

The pressure on the budget is not abstract. Russia pays refiners subsidies, known as "damper" payments, to hold down domestic fuel prices. Those payments reached 204 billion rubles in May alone. The bill is rising just as the state’s oil-and-gas revenues weaken: they fell 30% year on year in January-May, while the federal deficit reached 6.0 trillion rubles (KSE Chartbook). The refinery damage also changes what Russia sells abroad, shifting exports away from diesel and petrol, which carry more value because processing has been added, and towards raw crude, which earns less per barrel.

The Russian military is likely to feel shortages last, because military users get priority. Polish analysts have cautioned that claims of immediate battlefield fuel starvation remain a hypothesis rather than an established fact (Onet).

Europe’s Problem Is Political, Not at the Pump

For European drivers, including Irish motorists, the direct price effect appears limited. If more Russian crude reaches world markets, it could even push global oil prices slightly lower (Tagesschau). The harder problem sits inside the EU’s sanctions machinery.

Bulgaria’s only major refinery, the Lukoil-linked Neftochim plant in Burgas, supplies roughly 60% of the country’s fuel. Sofia is now using that dependency to push back against the EU’s proposed 21st sanctions package, which would tighten restrictions on Russian-linked ownership. Bulgaria’s foreign minister has described the position as "reservations" rather than a formal veto, but the energy argument is already shaping the talks (BNR News, Euronews).

Hungary’s dependency is profitable as well as logistical. Its refiner MOL buys discounted Russian Urals crude but prices finished products against the global Brent benchmark, keeping the difference. Budapest has built a windfall tax around that spread (24.hu). Sanctions that narrow the Urals discount would hit both MOL’s margin and the government’s tax base.

KSE estimated that 192 shadow-fleet tankers carried Russian crude or oil products in April alone. Ukrainian strikes and EU sanctions are aimed at different points in the same oil chain. The strikes create physical scarcity inside Russia. Sanctions try to limit the revenue Moscow earns from what it can still export. But while member states bargain over refinery dependence on land and shadow tankers keep moving at sea, neither lever is doing the full job.