Economy

Russia's oil wealth fails as drivers queue for gas

Drone strikes, war and budget strains have fueled gasoline shortages across Russia and Crimea, driving up prices, threatening harvests and undermining Moscow's image.

Russia's President Vladimir Putin (R), Rosneft CEO Igor Sechin (R) and Deputy Prime Minister - Presidential Envoy to the Far Eastern Federal District Yury Trutnev (L). September 11, 2023. [Pavel Bednyakov/AFP]
Russia's President Vladimir Putin (R), Rosneft CEO Igor Sechin (R) and Deputy Prime Minister - Presidential Envoy to the Far Eastern Federal District Yury Trutnev (L). September 11, 2023. [Pavel Bednyakov/AFP]

By Galina Korol |

In one of the world's top oil-producing nations, drivers are lining up for hours -- and sometimes walking away with nothing. Gas stations from Crimea to the Russian Far East are rationing fuel, issuing vouchers and turning away angry motorists.

Videos circulating on Russian social media show scenes that evoke a Soviet past many hoped was gone for good: long queues, empty pumps and frustrated voices asking how an oil superpower ran dry.

"I just arrived at the gas station to fill up. They said the gas is all gone. They're giving it out by voucher," a woman in Crimea says in a viral August clip. "What do you mean by voucher? What’s happening? Have we returned to the Soviet Union again?"

Another video, filmed somewhere in Russia, shows a line of cars snaking out of sight. An off-camera voice warns: "The line will probably be a kilometer long soon. People are waiting for gas, but apparently there is no gas. At all."

The Rosneft logo. January 4, 2025. [Jaque Silva/NurPhoto/AFP]
The Rosneft logo. January 4, 2025. [Jaque Silva/NurPhoto/AFP]

The scale of the shortage

A growing fuel crisis is hitting several Russian regions, according to local media reports.

Shortages first surfaced in occupied Crimea and have spread to Primorye, Transbaikal and the Irkutsk region.

Independent outlet iStories reported long lines at gas stations and said AI-95 fuel has vanished from some markets. Authorities in Transbaikal admitted it could take at least a week to restock.

The Moscow Times reported August 20 that gasoline has disappeared in parts of Primorye, including Vladivostok. Drivers on the Ussuri Highway face waits of up to two hours, and only emergency and business vehicles can refuel with special cards.

"The pumps are covered with 'Out of order' signs," one driver told the paper. "You can still fill up in larger towns, but the lines are an hour and a half to two hours long."

Sergey Aksyonov, the Kremlin-appointed governor of Crimea, acknowledged the fuel shortage on the peninsula during an August 20 broadcast on Krym-24, according to Express.

Aksyonov blamed reduced refinery output and said: "After the special military operation ends, several issues will go away, and everything will return to the previous level."

For now, fuel remains scarce.

Ukrainian political scientist Alexey Buryachenko told Express that "the interests of the people are not just secondary, they rank third," noting that Russian oil producers prioritize the war effort.

Wholesale fuel prices have surged to record highs, The Moscow Times reported. On August 19, a ton of AI-92 cost 71,970 RUB ($897), up 40% since January, while AI-95 reached 81,337 RUB ($1,014), a 50% jump.

A resource crematory

Vitaliy Shapran, an economist and former member of Ukraine's National Bank Council, told Kontur that Russia's fuel crisis is "quite critical."

"The gasoline crisis has affected densely populated regions of the Russian Federation and even remote areas where Russians spend their summer holidays en masse," he said.

Shapran noted gasoline prices at Moscow gas stations have risen 5.3% since January. While modest on the surface, he called the increase "an anomaly" given falling oil prices and a stronger ruble over the past seven months.

Russian financial journalist Maksim Blant, now living in Latvia, said experts see several causes for the supply collapse. He described the war as a "large resource crematory," pointing to related shortages like alcohol as further evidence.

Blant said the military-industrial complex "only works to destroy resources, with fuel being one of them." He added that "everything in the endless Ukrainian fields, forests and steppes is simply being stupidly destroyed."

Harvest season overlaps with heavy fighting, and farm machinery drives up fuel demand. Blant also noted that Ukrainian drones are striking Russian oil infrastructure.

Western sanctions and repeated drone attacks have severely damaged Russia's refining industry, raising doubts about the Kremlin's ability to keep fuel flowing.

The Moscow Times reported August 18 that shutdowns have taken 38.3 million tons of refining capacity offline, about 14% of Russia's total oil processed last year, according to Reuters.

Shapran warned of a critical shortage of storage tanks for oil and refined fuel. He said Transneft "was supposed to finish building a storage tank facility, but it was only partially put into operation due to a lack of funds."

Shapran added that losing "even 10-20% of a refinery's capacity directly impacts oil production and refining."

Ivan Us, chief consultant at Ukraine's National Institute for Strategic Studies, called the combination of factors "a perfect storm." He told Kontur that Russia faced a similar situation in September 2023, when the government cut spending to save budget funds.

They cut subsidies that compensated gasoline sellers for keeping fuel in the domestic market rather than exporting it. The move made local sales unprofitable, and companies slowed shipments.

Us said Moscow could repeat that approach to address a "huge hole" in the budget.

On August 1, the Finance Ministry reported a July deficit of 1.2 trillion RUB (roughly $14.9 billion), pushing the total shortfall for the first seven months of 2025 to 4.9 trillion RUB ($60.8 billion), about 30% above the annual target of 3.8 trillion ($47.2 billion).

"What they expected for the whole year happened in one month," Us said, noting that cutting price-stabilizing subsidies could help. Those payouts totaled 1.815 trillion RUB ($22.5 billion) in 2024, with 2025 estimates reaching 2.6 trillion ($32.3 billion).

Painful issue for Putin

Experts say the Kremlin has few quick fixes for the fuel crisis. Refinery repairs are stalled by Western sanctions, and Ukrainian drones continue to strike key facilities.

"I don't rule out some harvest remaining in fields due to fuel shortages and bad weather," Shapran warned, adding that rising fuel costs during harvest season are likely to worsen inflation.

Russia may seek imports from Belarus and Kazakhstan, but prices keep climbing.

Buryachenko called the shortage "a painful social issue for [President Vladimir] Putin" saying it undercuts Russia's image as a "resource superpower."

Long lines and fuel vouchers now clash with Kremlin propaganda, amplifying public frustration -- pressure that analysts say could weigh more heavily than economic losses alone.

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