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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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.

On 4 August, Kazakhstan’s Trade and Integration Minister, Arman Shakkaliyev, confirmed that Russia’s largest online retailer is building 260,000 square meters of warehousing space in Almaty and Astana.

In the same appearance, he told Kazakh shoppers to favor domestic marketplaces instead. Take the construction money, steer the customers away: that is Astana’s answer to a war that has driven Wildberries to look abroad for shelter.

The warehouses aren’t new—they’ve been under construction for years. And officially, the ministry says, Wildberries hasn’t asked to move its Russian operations to Kazakhstan at all. Astana is drawing a careful line: a Russian company can build here, but it cannot relocate its business here to escape the drones.

The wariness predates the strikes. Kazakhstan already taxes foreign marketplaces at 12% and can block those that fail to register. Of marketplace complaints logged in 2024, 73.7% concerned Wildberries, even as home-grown Kaspi held more than 70% of the market to Wildberries’ 17.2%. Astana was fencing the platform in before the first drone struck.

The bill reaches the neighbors

Kazakh sellers put their losses at roughly 2 billion tenge ($4.2 million) by one count, and the Ecommerce-KZ association estimates more than $2.1 million—neither figure has been confirmed, and the minister has told people not to trust the numbers circulating online.

More than 120,000 Kazakh entrepreneurs were on the platform at the end of 2025, and Wildberries says it is repaying them in stages, working with the ministry and the business chamber Atameken.

Kyrgyzstan is hit harder. Its garment industry leans heavily on Wildberries, and individual producers have lost between 1 million and 100 million soms ($11,400 to $1.14 million) each—enough that Bishkek offered a tax holiday to garment firms through year-end.

What Wildberries wants sheltered is not neutral cargo. Ukraine says it strikes the retailer because the platform is used to trade body armor, drones, and their components that reach Russian forces.

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That leaves Kazakhstan exposed: it has spent the past year tightening dual-use export controls to avoid Western secondary sanctions, and now a company that sells to the Russian military wants to move its logistics onto Kazakh ground.

For now, the shelter barely exists. Wildberries wants to rent about 100,000 square meters—close to every empty warehouse Kazakhstan has—and the complexes it is building will not open until 2027. By then, Astana may have made up its mind about how much of Russia’s retreat it actually wants on its soil.

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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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.