Russia can’t refine its way out of its fuel crisis, so it is changing who controls the already existing fuel. Months of Ukrainian drone strikes on refineries have driven shortages and rationing across much of the country. The government’s answer isn’t more fuel—it is a different market.

Faced with the shortage, the Kremlin had options. In June, analysts urged it to raise the exchange quota to push more fuel onto the open market and toward the regions running dry.

It did the opposite. The mandatory share of gasoline that producers must sell on the open exchange was cut from 15% to 10%, with the majors pushing for 2%, and the exchange was closed to anyone but buyers who will use the fuel themselves, shutting out traders who bought to resell.

That choice adds no fuel. It moves distribution off the exchange that set prices for a decade and into direct contracts between the big producers and the buyers they pick—handing the majors the chain from refinery to pump. Part of the package came straight from proposals Rosneft head Igor Sechin sent to President Vladimir Putin.

Winners and losers

The winners are the big, vertically integrated oil companies, which refine up to three-quarters of Russia’s oil. Direct deals let them keep the margin that once went to middlemen and choose who gets supplied; drop the quota to 2%, and about 5 million tonnes of gasoline a year move into their private channels.

The losers are the independent stations—60% to 72% of Russia’s roughly 25,000 gas stations, depending on who’s counting, and now unable to buy at the exchange price.

Alexander Moiseev, who owns the Kostroma Fuel Company, has been hauling gasoline from Surgut, 2,000 kilometers away, at 118 rubles a liter ($1.45) with freight, because the majors won’t sell to him wholesale. He works on a minimal markup. Rosneft, meanwhile, has multiplied sales at its own pumps.

What stabilization there is has been narrow. Prices eased mainly where supply was steered—Moscow, St. Petersburg, the big cities—while regions thick with independent gas stations stayed short, independent analyst Kirill Rodionov told Kommersant.

None of this is hidden. Facing the crunch, the government also let refiners sell banned Euro-2 gasoline again; online marketplaces pulled fuel listings; and Deputy Prime Minister Alexander Novak called the market “challenging but under control.”

In occupied Crimea it goes furthest: this week, the occupation authorities announced fuel sales were stabilizing, even as they capped each car at 20 liters and fixed the price of AI-92, the Crimean Tatar Resource Center reported.

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Occupied Sevastopol puts fuel back on open sale—then caps every car at 20 liters

The market goes dark

As the exchange shrinks, its prices no longer reflect the market, and the state publishes less information on output, stocks, and regional supply. The people who most need to see where Russia’s fuel balance is breaking—regulators at home, and the sanctions monitors and energy analysts abroad who read that data—are left with less to look at, market participants told Kommersant. The market is going dark.

Whether the change sticks is contested. Some read the cuts as a passing emergency. Others expect the market to keep sliding toward closed, bilateral deals—less transparent, harder for newcomers, the independent stations ever more tied to the majors, Viktoria Trifonova, Senior Analyst at Yakov & Partners, told Kommersant. The state has reached for limits, subsidies, and hands-on redistribution ever since the 2018 price crisis.

Keeping the independent gas station chains alive was never the goal, NEFT Research’s Dmitry Prokofiev wrote in Kommersant—it was to keep fuel flowing to the big cities of European Russia and, above all, to the priority government sector.

Occupation officials in Sevastopol and occupied Crimea are telling residents the fuel crisis is easing—and this week they resumed “free sale” at a handful of named stations. From 6 August, every grade would again be sold openly on the TES network, occupation governor Mikhail Razvozhaev said, and AI-92, he noted, has been cut and fixed at no more than 100 rubles per liter ($1.23).

The catch is in the same announcement: no more than 20 liters per car, volumes the governor himself called small, and—at ATAN’s seven stations the same day—no filling canisters.

In occupied Crimea, the ATAN network capped diesel at 30 liters per customer and charged 119 rubles per liter ($1.46), the Crimean Tatar Resource Center reported.

Occupation authorities blame logistics and promise the caps will loosen and prices will fall once supply stabilizes. But shortages, high prices, and rationing show that the peninsula’s supply problems are far from solved, the center said. Crimea is caught in a shortage that now stretches across Russia, from filling stations to farms.

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First the pumps, then the harvest, now the commute—Russia’s fuel shortage keeps finding new victims

None of this is new. Sevastopol restricted fuel sales on 22 May, Crimea on 29 May, and for weeks drivers have been buying by QR code. Through the summer, Ukraine’s drone campaign has been draining the seaborne lifeline that feeds the peninsula. The worsening supply of fuel, power, and water is a natural consequence of the war and the occupation, Ukraine’s military intelligence said.

Ukrainian drone strikes have forced Russia to import gasoline—shipping cargoes from as far as Morocco to an Arctic port—and to pay for the damage twice over. Moscow now subsidizes both the refineries the drones keep setting on fire and the foreign fuel replacing what those refineries can no longer produce.

Russia caps fuel prices at home below what refiners could earn abroad, and the budget pays them the difference—so they keep supplying the domestic market rather than exporting everything. The payments, together with related reimbursements, reached 1.221 trillion rubles ($15 billion) from April through July, Finance Ministry data show—close to the full annual budget of Moscow Oblast, the region ringing the capital.

Those monthly payments have roughly halved since spring, to about 190 billion rubles ($2.4 billion) in July, as lower oil prices narrowed the gap the subsidy fills.

Russia cannot keep its refineries running

Russian crude processing fell to 3.6 million barrels a day in July, its lowest since 2002 and roughly a third below the seasonal norm. Ukraine has hit at least 24 of Russia’s 34 largest refineries in some 50 strikes.

Fuel shortages and rationing now affect 50 million people—about a third of Russia’s population—according to a Financial Times analysis. Russia runs the world’s third-largest oil-refining industry, so the lost output has tightened diesel and gasoline supply beyond its borders. With less capacity to refine at home, Russia has had to export more raw crude and less high-value fuel.

With its refineries down, Moscow is now paying a second subsidy—this time to the importers bringing gasoline in. Gasoline is arriving by rail from Belarus and Kazakhstan and by sea from India and, in mid-July, Morocco: a cargo loaded at the port of Tangier and discharged at Murmansk, on the Arctic coast.

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Why Russia is importing gasoline made from its own oil

Ukraine has already named the import route as a target. In early July, presidential sanctions commissioner Vladyslav Vlasiuk called Russia’s new reliance on imported fuel a fresh vulnerability and said Kyiv had raised a response with the European Commission—though the EU’s next sanctions package, now in preparation, is so far built mainly around other measures.

A country that ships crude out of the Arctic is now shipping gasoline in through it.

Ukrainian drones struck one of Russia's five largest oil refineries in Yaroslavl on the morning of 6 August, setting off several fires across the site, monitoring channels reported. Open-source analysts placed the blazes on the refinery grounds, while the region's governor claimed his air defenses downed the entire raid. The strike continued a months-long campaign that has pushed Russian oil refining to its lowest level in more than two decades.

Fires break out across the refinery

Ukrainian monitoring Telegram channel Exilenova+ first reported the attack around 4:00, later sharing footage that showed thick black smoke rising from several points on the site. Fire Point, the Ukrainian company that builds the FP-1 long-range drone, said Ukraine's Defense Forces hit the plant with the domestically made FP-1s. Open-source analysts geolocated one blaze to the refinery grounds. Astra, a Russian news Telegram channel, reported one fire on the plant's territory and a second it had not yet located.

One of Russia's biggest refineries

Slavneft-YANOS, also called the Novo-Yaroslavl refinery, ranks among Russia's five largest and is the biggest in the country's central regions. It processes about 15 million tonnes of crude a year into gasoline, diesel, aviation kerosene, jet fuel, lubricants, and bitumen. Rosneft and Gazprom jointly control 99.7% of its parent company, Slavneft. The plant's fuel feeds central Russian industry, airports, the Northern Railway, and military sites. It sits more than 700 kilometers from Ukraine's border.

Russia claims it downed every drone in the region

Yaroslavl Governor Mikhail Yevraev first reported the region was under drone attack around 3:00 and closed the highway toward Moscow. He later claimed the region had repelled its most massive drone raid, downing all 88 drones with no casualties. Yevraev stated that a detached house burned, windows were shattered in several apartment blocks, and residents' cars were damaged. 

Russia's Defense Ministry claimed it destroyed 605 drones over several regions overnight.

The plant has burned repeatedly in 2026, catching fire on 28 March, 26 April, 8 and 22 May, and 6 and 16 July before the latest hit. That made 6 August the seventh strike on the refinery this year. In the 16 July attack, an FP-1 struck the plant's tank farm.

Russia's refining in retreat

Ukraine has sharply expanded its FP-1 deep strikes on refineries this year, knocking out around 26 plants. By late July, only eight had fully restarted and at least 11 partly. Seven refineries stayed idle. Russian refining fell to 3.6 million barrels a day, its lowest since May 2002. 

Earlier, Moscow banned fuel exports, boosted gasoline imports from Belarus 25-fold, and turned to India and Morocco. It also let refiners sell Euro-2 gasoline, a grade banned in Russia since 2013, through 1 July 2027.