Russia Ships Crude as Pumps Run Dry

Ukrainian drone strikes have 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 loading at Russia's western ports is heading for a record June, at around 2.7-2.8 million barrels per day. More Russian oil is going out to sea while Russians queue for petrol.

The reason is mechanical. A refinery turns crude oil into the fuels people and armies actually use: petrol, diesel, jet fuel. Ukraine is not stopping Russia from pumping crude. It is damaging the part of the system that turns crude into usable fuel. When crude cannot be processed at home, it is pushed towards export terminals instead. That is why seaborne shipments are rising while filling stations run dry (Tagesspiegel).

The Moscow refinery gives a sense of the scale. It processed about 11.6 million tonnes of crude in 2024 and is now expected to remain offline for months (Focus). When a plant that size goes dark, petrol and diesel disappear from the domestic market together. Russian gasoline output has fallen to about 90,000 tonnes per day, roughly a quarter below the June daily average.

The fuel Russia can still produce is also becoming poorer. Polish sources report an emergency downgrade from Euro 5 to Euro 3 standards, which means dirtier fuel with higher sulphur content, because production of higher-grade fuel 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). In Tatarstan, the agriculture minister advised farmers to keep ten days to two weeks of reserves (The Moscow Times).

The pressure on the Russian budget is also visible. Moscow pays refiners subsidies, known as "damper" payments, to keep domestic fuel prices stable. Those payments reached 204 billion rubles in May alone. The bill is rising at the wrong moment: oil-and-gas revenues fell 30% year on year in January-May, while the federal deficit reached 6.0 trillion rubles (KSE Chartbook).

There is another loss hidden in the export numbers. Refined products such as diesel and gasoline sell for more because processing adds value. If refinery damage forces Russia to export more raw crude instead, the country earns less from each barrel than it would have earned from fuel.

The Russian military is likely to feel the shortage last, because military users get priority. Polish analysts have warned that claims of immediate battlefield fuel starvation remain a hypothesis, not an established fact (Onet).

Europe's Problem Is Political, Not at the Pump

For European drivers, including Maltese ones, the direct price effect looks limited for now. More Russian crude reaching global markets could even put slight downward pressure on oil prices (Tagesschau). The harder question is political: whether the EU can keep tightening sanctions when some member states still depend on Russian-linked infrastructure.

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

Hungary's dependence is not only logistical. Its refiner MOL buys discounted Russian Urals crude, then prices finished products against the global Brent benchmark. The margin sits in the gap between the two prices. Budapest has built a windfall tax around that spread (24.hu). If tighter sanctions reduce the Urals discount, MOL loses margin and the Hungarian government loses tax revenue.

KSE estimated that 192 shadow-fleet tankers carried Russian crude or products in April alone. Ukraine's strikes and EU sanctions are hitting different points of the same oil chain. The strikes create physical scarcity inside Russia. Sanctions try to limit the revenue Russia earns from what it still exports. But while member states bargain over refinery dependence on land and shadow tankers keep moving at sea, neither instrument does the full job.