Ukrainian strikes drive Russian petrol prices to record highs

Wholesale petrol prices in Russia have surged to record levels following a series of Ukrainian drone strikes on oil refineries, highlighting the economic toll of the ongoing conflict.

Prices for Russia’s most common petrol grade, A95 (Euro 95), reached Rbs82,300 ($1,023) per tonne on the St Petersburg exchange on August 20, up 55 per cent since January and 8 per cent since the start of August, Caliber.Az reports, citing foreign media.

The escalation comes after Ukraine struck at least four major Russian refineries since early July. While attacks on Russia’s oil infrastructure are not unprecedented, their frequency and scale have intensified in recent months.

“In 2024, the attacks were numerous but scattered, usually limited to a single refinery at a time, and the damage was typically repaired fairly quickly,” said Sergey Vakulenko, senior fellow at the Carnegie Endowment for International Peace.

“The current campaign is aimed at all the plants in a key consumption and refining region, and could put them out of operation for a long time or ‘even permanently.’”

The strikes, combined with attacks on railway infrastructure in central Russia, have disrupted fuel transport and train services, prompting a rise in car usage and further increasing domestic demand. According to Sergei Kaufman, analyst at Moscow-based brokerage Finam, at least 10 per cent of Russia’s refining capacity has been disrupted.

In response, Moscow imposed a full ban on petrol exports on July 28, expanding previous partial restrictions. The move boosted domestic shipments by 150,000 tonnes in August but has failed to halt price growth. “Even with the export ban in place, domestic demand is not being fully met,” Kaufman said.

Retail petrol prices have risen more slowly than wholesale rates thanks to state support for oil companies and an unspoken ban on sharp price increases, but the increases remain substantial.

In regions such as Chita, in eastern Russia, fuel is being rationed through coupons issued to organisations—a practice reminiscent of the late Soviet era. Russia-annexed Crimea is also facing shortages, with Sergei Aksyonov, head of Crimea appointed by Moscow, citing “both reduced production volumes and logistics.”

Analysts predict that prices will continue rising through September, especially in regions hard to supply, though a nationwide shortage is unlikely. Large vehicles and military equipment, which run on diesel, are not affected. Ukraine has indicated further attacks are planned.

“More to come,” said Ukraine’s general staff after striking the Syzran refinery in the central Samara region on August 15.

Vakulenko cautioned that while Russia may increase imports of petroleum products from Belarus, “a full-scale fuel supply crunch—one affecting the army, transport and agriculture, and capable of disrupting the economy—is still distant.”

By Aghakazim Guliyev