Russia is the world’s third-largest oil producer, pumping roughly nine million barrels a day, but it cannot supply its own filling stations. Long queues, some of them miles long, have built up across the country.
More than half of Russia’s 83 regions are now reporting shortages, the result of a sustained Ukrainian drone campaign against refinery infrastructure that is hitting harder and more frequently than at any point in the war.
For a government that has sold this war as a swift and victorious operation, empty pumps at home are a problem without an easy answer. And the problem extends beyond fuel.
The crisis deepened sharply in June, as large numbers of longer-range Ukrainian drones began to strike targets deep inside Russia. Ukraine hit Moscow’s Kapotnya refinery twice — on June 12 and June 18 — knocking it offline until at least the end of the year. Kapotnya sits at the heart of the Moscow fuel supply network and is surrounded by dense air defenses; the fact that drones got through signals that no Russian facility is now truly safe.
Russia has responded by doing something it has not done in years: importing gasoline. Fuel is being sought from Kazakhstan and from Belarus’s Mozyr and Novopolotsk refineries, but their capacities are not enough to close the gap. Moscow is negotiating large-scale purchases from India, where refineries process Russian crude and may sell the products back, though the logistics remain complex. Draft amendments to Russia’s tax code would extend the government’s damper-payment subsidy to cover fuel imports — a measure that would add further strain to already stretched state finances.
The precise scale of the damage is difficult to establish. Russia classified crude oil production statistics in 2023 and petroleum product data the following year. Rosstat has now announced it will also stop publishing retail petrol prices broken down by region.
What figures do exist suggest a deterioration that was already serious before June’s acceleration. At the end of March, Russia’s daily refined oil output was around 5.2 million barrels; that fell by up to 700,000 barrels — a decline of 13% — in April and May. After the Kapotnya and TANECO strikes in mid-June, the loss of capacity may have reached 28% against prior years.
In volume terms, operating refineries are now producing roughly 85,000 tonnes of petrol per day against summer peak demand of around 110,000 tonnes, leaving a structural daily shortfall of approximately 25,000 tonnes. Eight of Russia’s 10 largest refineries have been affected; the three plants supplying Moscow via pipeline — Yaroslavl, Ryazan, and Kstovo — have all been hit.
The shortage has produced rationing, long queues, and rising prices at independent stations, which are not required to limit them. There is enough fuel for the army, key industries, and agriculture — but everywhere else the choice is between paying more and waiting longer.
The crisis matters politically. A Gallup poll conducted before the most recent strikes and published on June 30 found that 60% of Russians said economic conditions were worsening, the highest share in the 20 years Gallup has tracked the question, and the first time pessimists have formed an outright majority. Some 56% said their living standards were deteriorating, also a record.
The effects go beyond public mood. The Bank of Russia has flagged rising petrol prices as a key upside risk to inflation, which climbed to 6% at the end of June — well above the central bank’s 4% target. That inflationary pressure constrains the pace of interest rate cuts, despite calls from business and from President Vladimir Putin himself to ease more quickly. A higher base rate — currently at 14.25% — means the non-defence part of the economy finds it harder to invest, and consumers remain cautious, weighing on growth.
The government has cut its 2026 GDP growth forecast from 1.3% to 0.4%, and even that looks optimistic now. Russia’s budget deficit for the first five months of the year reached 6 trillion rubles, or 2.6% of GDP — already 60% above the planned annual level.
Higher oil revenues from the Iran-war price spike have helped, but cannot offset the combined drag of wartime spending, a damaged refining sector, and a strong ruble squeezing hydrocarbon revenues. Higher inflation means more spending on arms procurement and social subsidies; higher borrowing costs mean the state must issue debt on worse terms. Each feeds the other: wider fiscal deficit, persistent inflation, weak growth, and an elevated cost of capital — a loop that is becoming harder to break.
There are no good solutions for the Kremlin. At present, Russia subsidizes petrol through damper payments that keep pump prices 20–30 rubles per liter below the market rate, simultaneously stimulating consumption and making imports uncompetitive. Scrapping damper payments would save the government billions of rubles a month and simplify imports — but higher petrol prices stoke inflation and are politically toxic, especially for a leader who has promised his home front a degree of normalcy.
The alternatives are no better. Ration cards are administratively complex and carry the symbolic weight of systemic failure. Letting queues do the work invariably breeds black markets at prices higher than a liberalized market would set. Russia has already moved to lower fuel quality: since autumn 2025, refineries have been legally permitted to sell Euro-3 petrol under the Euro-5 label, with sulfur content allowed at 15 times the permitted level.
The fuel crisis is a strategic achievement for Ukraine, not a side effect of the war. Until recently, oil companies were able to repair their facilities fast enough to avoid systemic failure. That is no longer the case. Firepoint, the drone manufacturer whose FP-1s and FP-2s struck Kapotnya, is currently producing around 100 units a day, with roughly 10% reaching their targets; the company has announced expansion plans, and a major German defense company is discussing joint production. If that materializes, the race between Ukrainian drones and Russian repair teams shifts further toward Kyiv.
A government that cannot keep petrol stations stocked faces a different kind of legitimacy problem than one managing abstract economic metrics. That pressure creates incentives to seek a faster resolution elsewhere.
Whether by intensifying strikes on Ukrainian infrastructure or by accepting negotiating conditions it would otherwise have rejected, Russia has less time and fewer options than it had six months ago.
Unless Ukraine’s drone production plateaus, or Russia finds a way to harden its refinery infrastructure at scale, neither the fuel shortage nor the financial pressure it generates is going away.
Alexander Kolyandr is a Non-Resident Senior Fellow at the Center for European Policy Analysis (CEPA), specializing in the Russian economy and politics. Previously, he was a journalist for the Wall Street Journal and a banker for Credit Suisse. He was born in Kharkiv, Ukraine, and lives in London.
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