Rosneft CEO Igor Sechin has proposed that Russian oil firms refine at least 30% of their crude production domestically to address a worsening fuel shortage. The proposal, sent to President Putin, aims to mitigate the impact of Ukrainian drone strikes on refineries and supply routes.
The proposal highlights Russia's struggle to maintain domestic fuel supply amidst Ukrainian attacks on its energy infrastructure, potentially impacting global energy markets through export restrictions.
Igor Sechin, the chief executive of Russia's state-controlled oil giant Rosneft, has proposed that domestic oil companies be mandated to refine at least 30% of their crude oil production within Russia. This measure is intended to alleviate a growing fuel supply crunch that has intensified in recent months.
Sechin outlined these proposals in a letter sent to President Vladimir Putin at the end of May. The suggestions also include temporarily removing resellers from the sales process. Russian Deputy Prime Minister Alexander Novak has been tasked by Putin to evaluate these proposals and report on which could be implemented.
The fuel crisis in Russia has been exacerbated by a combination of rising demand and reduced refinery output. This slump in refinery operations is largely attributed to persistent Ukrainian drone strikes targeting Russian refineries and critical fuel supply infrastructure, particularly in occupied territories like Crimea and Mariupol. Several Russian regions have reported fuel shortages since May, leading to measures such as the suspension of fuel sales to private entities in Crimea.
On a federal level, Russia has taken steps to address the shortages, including authorizing refineries to produce gasoline and diesel with lower environmental specifications. Earlier in June, Russia imposed a ban on jet fuel exports until November 2026 to secure domestic supply. Authorities are also considering a complete ban on diesel exports as they attempt to stabilize the domestic market amidst ongoing disruptions and rising prices linked to Ukrainian attacks.