Russia reinstates gasoline export ban, fueling shortage fears
Russia reinstated the gasoline export ban, which had been suspended for the last two months. This signals the beginning of a fuel shortage. According to Deputy Prime Minister Alexander Novak, the embargo will be in effect longer than initially planned.
7:03 AM EDT, July 24, 2024
According to information from Deputy Prime Minister Alexander Novak, starting August 1, the gasoline export ban will be reimposed in Russia.
- We had an embargo adopted until September 1, temporarily suspended. From August 1, this suspension ends, and the gasoline export ban will automatically be reinstated. So, starting August 1, the ban will be in effect again - explained Novak during a meeting with journalists in Moscow.
The Deputy Prime Minister added that the Russian government is considering extending the embargo into September. This is surprising, given that gasoline demand typically decreases after the vacation season ends. Novak assured us that the Russian fuel market would be stable. However, he admitted that the market is sensitive to the supply of the appropriate quantity of 95-octane gasoline.
The Deputy Prime Minister of Russia added that the Russian government's decisions regarding the gasoline export ban are based on an analysis of demand and supply in the domestic market. This signals the beginning of a fuel shortage in Russia.
Fuel shortages could not be avoided
Russia limited gasoline exports to foreign markets starting March 1 for six months. This was intended to help avoid domestic fuel shortages and price spikes. It was only partially successful.
During this time, Ukrainian drone attacks on Russian refinery infrastructure significantly reduced processing capabilities, and some facilities had to shut down partially. In February, just before the ban was implemented, Russia sold about 141,000 barrels of gasoline abroad daily, nearly 14% of total production.
