Russia bans fuel exports: How does it affect India?
What's the story
In a major development, Russia has announced a partial ban on diesel exports and an extension of an existing ban on gasoline exports to all countries until the end of this year. The decision comes as petrol pumps across the country and in its occupied territories continue to run dry. The move is largely seen as a response to Ukraine's intensified drone attacks on Russian refineries in recent months.
Strategic decision
Russian Deputy Prime Minister Alexander Novak confirmed the country's plan
Russian Deputy Prime Minister Alexander Novak confirmed the country's plan to impose a partial ban on diesel exports until year-end. He also announced an extension of an existing ban on gasoline exports. "We will soon extend the ban on gasoline exports until the end of the year," Novak said, adding that this move would allow Russia to "further supply the market with petroleum products."
Supply issues
Initially, Russian officials blamed the ban on 'logistical reasons'
Initially, Russian officials blamed the oil shortages on "logistical reasons," promising a return to normal petrol and diesel supply. However, the situation has worsened in recent weeks. Novak admitted there was "indeed a slight shortage of petroleum products" in Russia but assured that it was "being covered by accumulated reserves." The summer saw a wave of Ukrainian strikes that hit processing capacity at key facilities, pushing fuel prices higher and leading to regional shortages.
Regional impact
Kyiv targeted major oil refinery in Bashkortostan region
The Moscow-backed administration in annexed Crimea has blamed "a reduction of production volumes at Russian refineries" for the fuel shortages. On Wednesday, Kyiv targeted a major Russian oil refinery in central Bashkortostan region, sparking a massive fire. According to Izvestia newspaper, petrol pumps across several Russian regions have started rationing petrol and diesel due to the ongoing oil shortage crisis.
Crisis deepens
Half petrol pumps in Crimea are inactive
In Crimea, half the petrol pumps are reportedly out of fuel and inactive. The governor has acknowledged the shortage, attributing it to "reduced production" at Russian oil refineries. Social media platforms are flooded with videos and images showing long queues of vehicles outside the few operational petrol pumps, highlighting the severity of the ongoing fuel crisis in Russia.
Impact
How Russia's fuel export ban will affect India
Russia's decision to halt fuel exports until year-end could ripple into India's energy landscape, even though New Delhi primarily imports Russian crude oil rather than refined fuels. The move may tighten global supply, pushing up international fuel prices and indirectly raising India's import costs. With Russia now India's largest crude supplier, higher benchmarks can squeeze refiners' margins and consumer prices. To cushion the blow, India may need to diversify sourcing, tap strategic reserves, or negotiate more favorable terms with Moscow.