By Charles Kennedy – Aug 04, 2025, 9:09 PM CDT
- Gasoline prices in Russia hit a record high after Ukrainian drone strikes damaged key refineries, cutting crude processing by 40,000 tons per day.
- A Kremlin-imposed gasoline export ban has failed to stabilize the market amid peak seasonal demand and low domestic stockpiles.
- Analysts warn the supply crunch could last into 2026, with prices likely to remain elevated through at least October.
Russia’s domestic gasoline market is under mounting pressure, with prices hitting a new record high despite an emergency export ban aimed at stabilizing supply. The price of Ai-95 gasoline surged past 77,000 rubles ($946.6) per ton on the St. Petersburg International Mercantile Exchange (SPIMEX) on August 4.
The latest spike follows Ukrainian drone strikes on August 2 that damaged multiple oil refineries across Russia, cutting processing capacity by around 40,000 tons of crude per day. Facilities in Ryazan, Penza, Samara, and Voronezh Oblasts were targeted, with the Ryazan refinery sustaining notable damage. Repairs could take anywhere from one to six months, industry sources say.
Moscow imposed a sweeping ban on gasoline exports on July 28, set to last until the end of August, in an effort to prevent fuel shortages and curb price increases. The Kremlin has used similar temporary restrictions multiple times in the past two years to safeguard domestic supply.
Despite the export ban, traders were warning just days before the record-breaking spike that the ban may not prevent shortages. Export volumes are far smaller than domestic consumption, meaning that redirecting them to the local market will have a limited impact.
Market participants expect state regulators to pressure oil companies to sell more domestically and delay planned maintenance. But even so, low domestic stocks, peak seasonal demand, and ongoing refinery repairs are straining the market.
The shortage concerns go beyond disrupted supply chains. According to industry sources, private retail networks have not built up sufficient fuel reserves this summer. A spike in interest rates to 20% made borrowing to stockpile gasoline prohibitively expensive, leaving traders without the buffer needed to weather sudden supply shocks.
In addition, frequent flight delays in Russia this summer have reportedly driven more travelers to take to the roads, pushing gasoline consumption higher than usual. The combination of low reserves and elevated demand has intensified fears that shortages will persist through September.
Ukraine’s strikes on Russian oil infrastructure are designed to limit Moscow’s fuel export revenues and disrupt supplies to its military. The damage from the latest attacks has added to the already fragile balance in the domestic fuel market.
Given that refinery repairs could extend into early 2026, the current supply squeeze is unlikely to be resolved quickly. Even with the export ban in place, the record price level strongly suggests the market is already grappling with real physical shortages rather than just speculative pressure.
Industry experts expect prices to remain elevated at least until October, when seasonal demand eases and local refineries complete major repairs. Until then, the Kremlin may be forced to consider additional interventions to avert a politically damaging fuel crisis.
By Charles Kennedy for Oilprice.com
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