"Look, Russia is a gas station masquerading as a country," Sen. John McCain famously quipped a decade ago, shortly after that country's 2014 invasion of Ukraine. Nothing has changed since then: "It's kleptocracy. It's corruption. It's a nation that's really only dependent upon oil and gas for their economy, and so economic sanctions are important."
There are sanctions and then there are sanctions.
"Kinetic sanctions" is the darkly humorous phrase for Kyiv's ongoing offensive against Russian energy production and distribution, and if a new report from Russia is correct, it appears to be having quite some effect.
"Relevant departments are discussing the extension of the ban on the export of gasoline from Russia and the introduction of a ban on the export of diesel fuel until the end of 2025," Russia-based Kommersant reported Tuesday. "This was reported by TASS with reference to a source in the industry."
Forgive any awkwardness, but this is a Russian-language report auto-translated by Safari.
Nothing is final yet, of course, but the report noted that "Retail gasoline prices have increased by more than 7% since the beginning of the year, overtaking inflation by one and a half times."
"The increase in wholesale prices is even higher," the reported continued, indicating more unpleasant surprises ahead at the pump.
Also on Tuesday, Russia’s Energy Ministry weighed "tighter rules for diesel fuel trading on the St. Petersburg Exchange," according to Meduza, and that the Exchange has "already imposed limits on price increases and capped the number of purchase orders for gasoline."
"The move comes amid record diesel prices," Meduza reported. "Since September 9, diesel quotes have climbed more than 14 percent." Clearly, traders have serious concerns over diesel's future availability.
Diesel is the lifeblood of armies.
That said, these are all reasonable measures, and none indicates that Russia is running out of gas or diesel. What they do indicate is that Kyiv's efforts have, in fairly short order, produced too much pressure on Russian energy production for Moscow to ignore.
Here's what to expect going forward, again according to that Meduza story:
Traders said wholesale diesel prices are already restricted. They believe the new measures could help cool the market but would not resolve the underlying shortage. The situation is expected to stabilize once “unscheduled repairs” at several refineries are completed at the end of September.
"Unscheduled repairs" is in quotes because that's a Kremlin euphemism for "Ukraine bombed several refineries." Whether those repairs can actually be completed by the end of September remains to be seen.
"This is how Russia says it can't fix all the damage Ukraine's strategic bombardment drones are doing to its energy infrastructure," is how military analyst Trent Telenko put it.
I'd put it like this: Is Kyiv continues to damage Russian energy production and distribution faster than Moscow can repair it, Kyiv's "War Against Oil" will put increasing pressure on Moscow's finances, and maybe even try the Russian people's patience. Assuming, of course, the Ukraine Army doesn't crumble in the meantime.
Stay tuned, because the War Against Oil only began about two months ago, and it's too early for anyone to have any idea how it plays out.
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