TESTIMONY: Russia importing gasoline — Putin's industrial collapse

TESTIMONY: Russia importing gasoline — Putin's industrial collapse

Introduction: A petroleum giant begging India for fuel

The most absurd paradox of the war

Russia is one of the three largest oil exporters in the world. It ships millions of barrels of crude every day. It draws oil revenues that long accounted for 40 to 50 percent of its federal budget. And yet, in June 2026, that same country is preparing massive gasoline imports from India to cover a structural shortfall of 25,000 tonnes per day. This reversal is not an anecdote — it is the most revealing symptom of what Putin's war has done to the Russian economy.

The KyivPost, drawing on documents obtained from the State Duma's budget committee and Russian industry sources cited by the RBC agency, documented on June 24, 2026 the preparation of a budgetary subsidy to finance gasoline imports from India. The mechanism: a subsidy calculated on the benchmark price of gasoline on the Indian market plus maritime shipping costs to Russian ports. The Duma's budget and tax committee approved the bill. A second and third reading vote was expected during the week of June 24.

The figures behind the refinery disaster

Russian fuel production has been cut by roughly 25 percent by Ukrainian strikes on refineries. Operational refineries are producing approximately 85,000 tonnes of gasoline per day. Summer demand runs at approximately 111,000 tonnes per day. The gap is 25,000 to 26,000 tonnes daily, or about 20 percent of total domestic consumption, according to estimates cited by Reuters. 16 refining facilities were struck in May 2026 alone. At least 6 more in June. Crude oil processing output is at its lowest level in two decades.

Belarusian deliveries from the refineries in Minsk and Mozyr — roughly 100,000 to 150,000 tonnes per month — are not enough to close the gap. Spot purchases from third countries, drawdowns from strategic reserves: all of these emergency solutions have limits. What remains is India — and its refining industry capable of processing Russian crude into exportable gasoline to be shipped back to Russia.

The Indian import mechanism: how it works

India: Russia's top crude buyer, soon its gasoline supplier

Since the full-scale invasion of Ukraine in 2022, India has become the largest or second-largest importer of Russian crude oil worldwide. In June 2026, New Delhi was buying a record 2.66 million barrels per day of Russian crude — roughly 423 million liters daily. That oil, purchased at significant discounts to market price, is processed in Indian refineries into a range of petroleum products, including gasoline.

The economic circuit that is taking shape is this: Russia exports cheap crude to India, India refines it, and Russia imports the refined product paying Indian market prices plus maritime shipping. The Russian budgetary subsidy is designed to offset the cost difference for importing companies. It is an economically absurd circuit from a value-added standpoint — Russia gives away the refining margin to India and then buys it back — but it is the only solution available in the short term.

The ethanol problem and regulatory adaptations

Indian gasoline contains approximately 20 percent ethanol. Russian automotive fuel standards had, until recently, allowed a maximum content of 5 percent. Last year, Russia raised that threshold to 10 percent — a move that now appears preparatory to these Indian imports. To import Indian gasoline at 20 percent ethanol, Russia will need either to modify its own standards or blend the Indian fuel with ordinary Russian gasoline to bring the ethanol content below the permitted threshold. That logistical and regulatory constraint adds complexity and cost to an operation that is already expensive.

There is also the question of engines. A high ethanol content can damage certain engines not designed for that fuel composition — particularly older Russian engines, of which there are many in the civilian and military vehicle fleet. Russia will therefore need to either adapt its technical standards, manage a targeted distribution of this fuel, or accept the risk of accelerated wear on certain equipment. None of those options is simple to implement at scale and under urgency.

The crisis reaches 25 Russian regions

Gas stations imposing limits, prices exploding

The fuel shortage has now reached at least 25 Russian regions, according to data compiled by independent Russian journalists and reported by Ukrainian and international media. In Moscow, Saint Petersburg, and Tatarstan — three of Russia's most economically developed regions — major retail chains have begun rationing gasoline sales per customer. Wholesale gasoline prices have exceeded 100 rubles per liter in several regions, roughly 1.34 dollars — a high level relative to average Russian purchasing power in a context of broad-based inflation.

The Russian government has imposed fuel export bans in an attempt to keep supplies on the domestic market. But those restrictions cannot create fuel where there is none — they simply redistribute a structural shortage. Russian energy market specialists, cited in reports from Meduza and the Moscow Times, have warned of the risk that the situation will worsen in the coming weeks if substitute imports cannot come on stream quickly enough.

Light aviation and agriculture in danger

The fuel crisis is hitting unexpected sectors. Russian light aviation operators have begun substituting automotive gasoline for aviation kerosene to power their aircraft — a technically dangerous practice economically forced by the surge in kerosene prices. Vadim Tsyganash, executive director of the Air Operators Association, stated publicly: "The situation is not yet critical, but it is moving in that direction. In one month, the question will become acute." The risk of aviation accidents resulting from the use of unsuitable fuel is real and documented.

Russian agriculture is also suffering. In regions producing wheat and sunflowers, farm equipment is struggling to find diesel during the harvest season. That pressure on the agricultural sector carries domestic economic and food supply implications. Russia prides itself on being a major agricultural power and grain exporter — but if its tractors run dry during harvest, that position could weaken. It is a further demonstration of how the destruction of refining infrastructure ripples far beyond the gas station forecourt.

India's delicate diplomatic position

New Delhi between economic opportunity and Western pressure

For India, this situation creates an opportunity and a dilemma at the same time. On one hand, selling gasoline to Russia would be economically attractive: using Russian crude bought at a steep discount to produce a refined product sold back to Russia at market price represents an appealing transformation margin. On the other hand, gasoline exports to Russia would expose New Delhi to the risk of being labeled a sanctions circumvention actor by Washington and Brussels.

The United States and the European Union are watching the situation closely. American secondary sanctions could theoretically target Indian companies that actively participate in fueling Russia's war machine. The ongoing India–EU and India–US trade negotiations provide additional leverage. New Delhi will need to find a careful balance between its short-term economic interests and its long-term strategic relationships with the Western democracies.

The geopolitics of refined petroleum

The situation illustrates the limits of the current sanctions regime. Primary sanctions hit Russia directly. But secondary sanctions — targeting third countries that facilitate sanctions evasion — are more delicate to impose without risking the disruption of important diplomatic relationships. India is simultaneously a key U.S. strategic partner in the Indo-Pacific against China and a massive buyer of Russian crude. That dual reality forces Washington into a more pragmatic and less punitive posture than maximum sanctions effectiveness would require.

Russia, for its part, skillfully exploits those cracks in the sanctions architecture. Moscow knows that countries buying its crude have little incentive to be cut off from that cheap supply — and little enthusiasm for suffering American secondary sanctions as punishment for their commercial pragmatism. As long as that diplomatic geometry holds, Russia retains economic survival channels — narrow, costly, humiliating, but real.

Ukrainian drones against the refineries: a systematic strategy

A deliberate campaign since 2023

Ukrainian strikes on Russian refineries are not accidental — they are part of a deliberate strategy of attrition targeting Russian industrial capacity. Since 2023, Ukraine has methodically targeted major Russian refineries: Salavat, Ryazan, Komsomolsk-on-Amur, Krasnodar, and others. These facilities, located 500 to 1,000 kilometers from Ukrainian territory, were reached by long-range drones that flew hundreds of kilometers before hitting their targets. Each successful strike further reduces Russian refining capacity and deepens the structural deficit.

The logic behind this strategy is twofold. First, to reduce fuel availability for Russian armed forces — tanks, armored vehicles, aircraft, and naval vessels all require fuel. Second, to create domestic economic tensions that exacerbate the difficulty of financing the war. The 25,000-tonne daily deficit is not only a logistical problem for motorists — it is an operational problem for the Russian army itself.

The escalation of strikes in May and June 2026

The intensification of strikes on Russian refineries in May–June 2026 — 16 facilities hit in May, 6 in June — corresponds to a deliberate escalation phase in Ukraine's strategy. This escalation follows the scaling-up of Ukraine's long-range drone fleet. The more Ukrainian drone production grows, the more the range and tempo of strikes can be sustained. It is a cumulative advantage: the more you strike, the more you degrade Russian capacity, and the greater the chance the next strike succeeds.

Russia has attempted to protect its refineries with additional air defense systems. But Ukrainian drones fly low, take varied trajectories, and saturate defenses through sheer numbers. Protecting every industrial site across a country the size of Russia is impossible. And with Ukrainian drone output continuing to climb, the problem for Moscow will only get worse.

The impact on Russian military capacity

Fuel for tanks and aircraft

The fuel shortage has direct implications for the operational capacity of Russian armed forces. T-72 and T-90 tanks consume between 200 and 300 liters per 100 kilometers. Russian offensive operations on the Donetsk and Zaporizhzhia fronts — involving hundreds of armored vehicles — require massive and continuous fuel supply. Any reduction in fuel availability translates into reduced maneuverability for armored units.

Russian military aircraft — Su-34s, Su-35s, Su-25s — consume enormous quantities of aviation kerosene. The aviation kerosene price surge documented in Russia in June 2026 also affects military procurement, which competes with civilian purchases on a strained market. The Russian army has priority mechanisms for fuel supply — but if overall production drops by 25 percent, even with priority access, forward-deployed units absorb the effects of the shortage. That is an operational factor military analysts are integrating into their front-line assessments.

Russian military logistics under pressure

Russian military logistics is already under strain after four years of attrition warfare. Ammunition depots have been destroyed by the dozens in Ukrainian strikes. Rail lines are regularly sabotaged. And now fuel reserves are under pressure. The Russian military-industrial complex, despite its central role in the war economy, cannot simultaneously compensate for all of these degradations. Every refinery strike, every fuel depot destroyed in Crimea or near the front, contributes to cumulative logistical degradation that Russia is finding increasingly hard to contain.

The casualty data published by the Ukrainian General Staff — assessed as credible in their order of magnitude by independent military analysts — reflects a colossal human and material Russian consumption. Over 1,395,000 military personnel put out of action by Ukrainian figures as of June 24, 2026. Thousands of tanks and armored vehicles destroyed. And now a fuel supply chain that is cracking. This is not an army winning a war — it is an army absorbing its growing costs with diminishing resilience.

Russia facing the wall of its own technological sanctions

When refinery equipment can no longer be repaired

A crucial dimension of Russia's vulnerability in this area stems from technological sanctions imposed since 2014 and tightened since 2022. Modern Russian refineries use equipment manufactured by Western companies — chemical catalysts from UOP (Honeywell), compressors from Dresser-Rand, control systems from Honeywell and Emerson. Since the sanctions, spare parts for that equipment can no longer be legally imported. Russia attempts to circumvent those restrictions through third countries, but available volumes are insufficient and lead times are incompatible with urgent maintenance needs.

The result: Russian refineries are maintained less and less effectively. Even without Ukrainian strikes, the progressive deterioration of equipment would have reduced refining capacity over several years. Ukrainian strikes simply accelerate a process already underway. The combination of technological sanctions and drone strikes creates a synergistic pressure on Russia's refining industry that Moscow cannot counter with available resources. That is one of the most concrete and durable effects of the Western sanctions policy.

Russia's attempts at domestic import substitution

Russia launched an import substitution policy in 2022 to reduce dependence on Western equipment. Considerable budgets were allocated to the development of domestically sourced refining equipment. But designing, testing, and deploying new turbines, catalysts, and control systems takes years — and requires engineering expertise that many Russian specialists have taken with them when leaving the country since 2022. The brain drain combined with sanctions creates a skills deficit that money alone cannot quickly fill.

Substitution projects are advancing, but at a pace incompatible with the current industrial urgency. In the meantime, Russia is living on buffer stocks, spare parts obtained through sanctions evasion at exorbitant prices, and maintenance schedules stretched beyond safety standards. Every Ukrainian strike on a refinery already weakened by maintenance neglect therefore causes greater damage than satellite images suggest — damaged systems are harder to repair, and maintenance teams are less well equipped to do so.

The medium-term outlook: a lasting shortage

Can destroyed refineries be rebuilt quickly?

Rebuilding damaged refineries is a long and expensive process. According to industry experts, a major catalytic cracking unit takes 18 to 36 months to reconstruct under ideal conditions — with open access to equipment and skilled labor. In the current Russian context, with sanctions on equipment, a departing workforce, and ongoing Ukrainian strikes, those timelines are likely far longer. And while Russian refineries are being repaired, Ukrainian drones keep striking. That is a race Moscow cannot win in the current configuration.

Estimates from independent analysts, notably from the Kyiv School of Economics, suggest that Russia's refining capacity deficit will remain structurally significant for at least two to three years — even if the war ended tomorrow and sanctions were lifted. Some damage to refining infrastructure is irreversible in the near term. Other damage requires equipment that, under sanctions, cannot be legally obtained. Russia will have to live with this deficit — and its consequences for its economy and military capacity — for years to come.

Toward a permanent normalization of external dependency?

If gasoline imports from India materialize and become permanent, they will create a new structural dependency for Russia. Dependence on India for fuel, on China for microelectronics and industrial components, on North Korea for ammunition: the strategic autonomy that Putin claimed to be building for years is in reality reversing. Russia in 2026 is more dependent on external partners than it has ever been — with the difference that it no longer has a choice of partners and must accept their terms.

This multiple and constrained dependency represents a real long-term strategic vulnerability for Moscow. If India decided, under Western pressure or for its own foreign policy reasons, to reduce gasoline exports to Russia, the Russian fuel crisis would worsen immediately. If China decided to cut deliveries of electronic components, the Russian defense industry would be paralyzed. Moscow has built a strategic dependency toward countries that do not share the same long-term interests — an extremely fragile position for a major power that presents itself as sovereign and self-sufficient.

Conclusion: the loop closes on Russia's war economy

A vicious cycle that is accelerating

Russia exports crude oil to finance the war. Ukrainian strikes destroy the refineries that would turn that oil into fuel. Russia runs short of gasoline. It must import that gasoline from India — which itself buys Russian crude. Russia spends its dwindling budget reserves subsidizing those imports. The subsidy adds to the budget deficit, already 60 percent above its annual projections. That vicious cycle illustrates how the different dimensions of Ukraine's strategy — drones, sanctions, infrastructure strikes — amplify each other to build cumulative economic pressure on Moscow.

Behind those statistics, behind those complex economic circuits, there is a simple reality: Putin's war is destroying Russia from within. Not just the public finances, not just the refineries — but industrial capacity, the skilled labor that fled, entrepreneurial confidence, the social fabric. A nation importing gasoline from South Asia because it chose to invade its neighbor: that is the real ledger, ten years after the annexation of Crimea and two years after the full-scale invasion.

What Ukraine has accomplished

Strikes on Russian refineries are one of the most strategically significant — and least celebrated — Ukrainian achievements in this war. They do not liberate territory. They do not produce dramatic images. But they systematically erode Russia's ability to fund, equip, and fuel its war machine. Every barrel of those 25,000 daily tonnes missing from the Russian system is a barrel that will not go into a tank, an aircraft, or a supply truck at the front. That is the attrition war in all its cold efficiency.

By Maxime Marquette, columnist

Columnist's transparency note

My sources and my analytical limits

This analytical testimony rests primarily on two primary sources: the KyivPost and Ukrainska Pravda, which reported on Russia's plans to import gasoline from India based on Duma documents and industry sources. I supplemented those with data from Reuters, the Moscow Times, and Meduza on the broader fuel crisis in Russia. I am clearly positioned in this text as supportive of Ukraine's strategy of striking refineries — a bias I assume but flag.

What I acknowledge not knowing

I do not know with precision the actual pace of Indian gasoline imports — the subsidy bill was still moving through the legislative process at the time of writing, and I do not know whether it was ultimately adopted on schedule. I also do not know India's precise response — whether gasoline exports to Russia have taken place or are in the process of being finalized. Those areas of uncertainty are significant and I have not presented them as established facts in the text.

Sources

Primary sources

KyivPost — Moscow Turns to Indian Gasoline Imports Amid Domestic Fuel Gap — 2026-06-24

Ukrainska Pravda — Lack of refined fuel is forcing Russia to export record crude oil volumes — 2026-06-24

Secondary sources

RBC-Ukraine — Russia's economy has reached dead end, Zelenskyy's sanctions adviser says — 2026-06-26

The Moscow Times — Russia Says No Budget Crisis Despite Deficit Exceeding Annual Target — 2026-06-10

Kyiv Independent — Ukraine turns to strangling Russian logistics in Crimea — and it's working — 2026-06-25

Reuters — Russia's budget deficit may almost triple this year as oil revenues decline — 2026-02-04

Kyiv Independent — Russian attacks kill 7, injure 89 across Ukraine over past day — 2026-06-27