Russia
Russian government halts diesel exports and slashes tariffs to counter severe seasonal fuel deficit
Russian Deputy Prime Minister Alexander Novak reported to President Vladimir Putin during a meeting with government members that while the cabinet has partially stabilized the domestic fuel market, altered logistics caused by refinery attacks and a sharp spike in seasonal demand continue to strain the sector.
Novak stated that attacks on Russia’s fuel and energy infrastructure damaged several oil refineries, leading to a temporary decline in gasoline and diesel production.
The drop in output has necessitated new shipment routes to deliver fuel to end-users, Novak said, adding that current demand is approximately one-third higher than during the same period last year.
The deputy prime minister noted that this situation has increased the burden on filling stations, raising the number of vehicles visiting the stations and leading to longer refueling times.
To balance the market, Novak recalled that the government and oil companies had previously taken a series of steps. Within this scope, gasoline exports were completely banned, and the production capacities of small and medium-sized refineries were utilized. Oil companies also maximized the capacity utilization of operating refineries, shortened maintenance periods, postponed planned maintenance to later dates, and released previously accumulated fuel inventories to the domestic market.
Government also halts diesel exports
Novak announced that the government banned diesel exports on July 8 as an additional measure.
Stating that oil product imports will be increased in July and the production of fuel with lower environmental standards will be expanded, Novak noted that the zero tariff on oil product imports was extended for another year to support imports.
Furthermore, Novak stated that the government reached an agreement with Russian Railways (RJD) to apply discounts on the rail transport of imported fuel. He also recalled that the mandatory exchange sale quota for gasoline was reduced from 15% to 10% and a price ceiling was imposed on the commodity exchange.
To secure the volume of fuel required by independent filling stations, Novak said that these operators have transitioned to direct contracts with oil companies, noting that this practice has been implemented in the Irkutsk Region and the Zabaykal Krai.
According to the information provided by Novak, independent filling stations previously purchased the bulk of their fuel from the commodity exchange or intermediary companies. Out of approximately 29,000 filling stations in Russia, 20,000 belong to independent operators.
Putin backs small refinery proposal
Zabaykal Krai Governor Alexander Osipov, who attended the meeting, proposed the establishment of a network of small-scale oil refineries across Russia.
Putin supported this proposal, stating, “In this area, the participation of small and medium-sized enterprises in the process is also necessary and encouraged. We will work more intensively on this matter.”
The Russian president also said that vertically integrated oil companies must supply products not only to their own stations but also to independent filling stations.
Putin instructed the government to make decisions regarding the subsidization of fuel prices in Crimea and Sevastopol “as quickly as possible.”
According to July 6 data from the Russian Federal State Statistics Service, the price of a liter of AI-92 gasoline in Crimea rose to 123.53 rubles. This figure represents an increase of approximately 50% on a weekly basis. The price of a liter of AI-95 gasoline rose to 170.59 rubles, increasing approximately 1.9 times, while the price of a liter of diesel reached 139.15 rubles, rising approximately 1.6 times.
In Sevastopol, the price of a liter of AI-92 gasoline rose by 8% to 105.47 rubles, the price of a liter of AI-95 gasoline increased by 15% to 148.64 rubles, and the price of a liter of diesel rose by 8.5% to 150.49 rubles.
Across Russia, in the week of June 30 to July 6, the price of a liter of AI-92 gasoline increased by 2% to 70.21 rubles, and the price of a liter of AI-95 gasoline rose by 2% to 76.19 rubles. The price of a liter of diesel reached 87.76 rubles, representing a 3% increase.
Since the beginning of the year, gasoline prices in the country have risen by 14%, while diesel prices have increased by 15%.
At the end of June, local governments in various regions of Russia introduced different restrictions on fuel sales to prevent panic buying.
Putin said on June 28 that there was a fuel deficit in the domestic market, but it was not at a critical level. Holding a meeting on the oil products market on the same day, Putin requested the preparation of additional measures to guarantee the uninterrupted supply of fuel to citizens, businesses, and socially critical institutions.
According to Sergey Tereshkin, General Director of Open Oil Market, the main reason for the spike in fuel demand is concern over potential supply shortages. Tereshkin said that consumers have increased both retail and wholesale purchases out of concern that access to fuel may become more difficult in the coming weeks and months.
Dmitry Kasatkin, Partner at Kasatkin Consulting, stated that the fuel shortage stems from a combination of altered logistics, local supply disruptions, and panic buying driven by high seasonal demand. He noted that demand for gasoline and diesel has increased not only in the retail market but also in the small and medium wholesale market.
According to Kasatkin, banning exports, postponing refinery maintenance, operating existing facilities at higher capacity, and releasing inventories into the market are among the most effective measures to increase domestic supply. However, he emphasized that delivering fuel to regions where the shortage is felt most acutely is also of critical importance.
Kasatkin said that increasing gasoline imports, RJD transport discounts, and production increases at small and medium-sized refineries are also important supporting steps, but their success will remain dependent on resolving logistics issues.
Tereshkin argued that the most critical steps are halting oil product exports and increasing fuel imports. Igor Yushkov from the Financial University under the Government of the Russian Federation assessed that increasing gasoline imports and the production of fuel with lower environmental standards would be the most effective measures.
Mikhail Burmistrov, General Director of Infoline-Analitika, said that RJD can apply discounts on certain routes, which will encourage the transport of additional cargo on the railway network.
However, Burmistrov stated that due to the limited capacity of unloading and loading terminals on the railways, the volume of these shipments should not be overstated, adding that the bulk of imported fuel will be transported by road.
Kasatkin predicts that partial stability could be achieved in the Russian fuel market during July. However, in his view, establishing a permanent balance between supply and demand, easing panic buying, and rebuilding inventories may take until late August or early September. He warned that local fuel shortages could occur in some regions until that date.
According to the analyst, if the measures taken by the government prove effective, price increases at filling stations may slow down in the coming weeks. Conversely, even if the market stabilizes, fuel prices are not expected to return to their former levels.
Russia
Europe ready for arms and missile control talks with Russia, FT says
Representatives of European nations are ready to renegotiate arms control and military conflict prevention agreements with Russia, according to a Financial Times report citing unnamed European officials.
The US is seeking to include European countries in discussions on a future security architecture.
In this context, Europeans look favourably upon returning to arms control mechanisms, including agreements limiting missile deployment and the restoration of arrangements operating during the Cold War era.
The newspaper cited the Open Skies Treaty, which allowed the US and the Union of Soviet Socialist Republics (USSR) to monitor each other’s military installations, and accords restricting the deployment of specific missile types among potential examples.
Participating states of the Organization for Security and Co-operation in Europe (OSCE) signed the Open Skies Treaty in March 1992.
Signatory states are obliged to permit observation flights by other party nations over their territories using photographic and video surveillance.
Russia withdrew from the treaty in 2021.
Russian authorities emphasized in statements at the time that Russia had done everything possible to preserve the agreement, “despite numerous violations of the Open Skies Treaty by the US, its allies, and dependent states.”
According to information obtained by the newspaper, US President Donald Trump’s administration is seeking Moscow’s consent to organize a multilateral meeting involving European representatives.
A source speaking to the Financial Times noted that the European security architecture is among the main agenda items at the United Arab Emirates (UAE) summit, though Trump will make the final decision regarding the nature of security guarantees the US will offer.
The first day of trilateral negotiations among Russia, the US, and Ukraine concluded on 10 November in Abu Dhabi, the capital of the United Arab Emirates, with the meeting lasting more than four hours.
According to Politico, the parties plan to address territorial matters, including borders and lines of contact, on 11 November during the second day of negotiations.
Sources speaking to the publication stated that resolving the territorial issue and the future security mechanisms of Ukraine and Europe are interconnected and must be discussed in parallel.
“It is obvious that the current system does not work. We need to create something new that will work effectively today,” one source said.
According to Politico and the Financial Times, American negotiators Steve Witkoff and Jared Kushner plan to invite Europeans to join the negotiations after the trilateral meeting concludes.
“We need Europe at the negotiating table,” a source told Politico.
The Financial Times source likewise stressed that European participation is essential to reach an agreement aimed at ending the conflict.
European capitals fear that Moscow and Washington could agree on security guarantees for Ukraine and the continent’s new security architecture without the involvement of European Union (EU) and NATO allies.
Furthermore, the issue of EU participation in talks resolving the conflict in Ukraine has caused differences of opinion between Moscow and European capitals.
Russia previously stated that the EU currently has no place at the negotiating table due to its stance on the conflict.
Russia
US raises NATO-style guarantees for Kyiv ahead of Abu Dhabi talks
US President Donald Trump’s administration has asked the Russian side whether Moscow objects to granting Ukraine security guarantees akin to NATO’s Article 5 on collective defence, and to having such guarantees provided directly by the alliance itself.
According to a Financial Times report citing a US official, the final decision on the nature of the US security guarantees will be made by US President Donald Trump.
The US official said the White House is seeking Russia’s consent for multilateral negotiations that would also include European representatives.
“At this stage, we firmly believe Europe must be part of the negotiations to end the war,” the official said on the matter.
According to the report, prior to the trilateral talks, Trump’s special envoy Steve Witkoff and his son-in-law Jared Kushner will hold consultations with representatives from Ukraine, the European Union, NATO, Germany, France, the United Kingdom, and Italy.
Rustem Umerov, representing the Ukrainian delegation, also confirmed that Kyiv will hold separate coordination meetings with European partners in Abu Dhabi to align positions and subsequent steps.
The newspaper reported that while European diplomats are sceptical about the prospects of a breakthrough in the Abu Dhabi talks, they consider participation in the diplomatic process essential to support Ukraine and prevent broader European security issues from being addressed without their involvement.
Ukrainian President Volodymyr Zelenskyy stated in late October that talks held in Oslo between Ukraine, EU countries, and US representatives discussed granting Kyiv security guarantees similar to the provisions of NATO’s Article 5 collective defence clause.
In February, Zelenskyy described credible guarantees for Kyiv as the “only real basis” for peace.
The issue of security guarantees will form one of the agenda items at the trilateral negotiations between Russia, the US, and Ukraine, scheduled for 10-11 November in Abu Dhabi.
These contacts mark the first trilateral meeting in roughly nine months, following the previous round held in Geneva in February.
Presidential Aide Vladimir Medinsky will head the Russian delegation at the talks, while the US side will be represented by the president’s special envoys Steve Witkoff and Jared Kushner.
Rustem Umerov will lead the Ukrainian delegation.
Moscow insists that the future security guarantees slated for discussion at the meetings must also cover Russia.
Kremlin spokesman Dmitry Peskov noted that guarantees can only be mutual.
At the beginning of the year, Russian Deputy Foreign Minister Aleksandr Grushko stated that security guarantees for Russia are an essential component in reaching a peace agreement on Ukraine.
“We accept that a peaceful settlement in Ukraine must take Ukraine’s security interests into account, but the key issue is, of course, Russia’s security interests,” Grushko said.
Russia
Putin proposes Arctic energy cooperation to US to ease gas sanctions
Following a diesel arrangement with the US and the prospect of expanding Russian fertiliser shipments, Moscow is offering Washington joint cooperation in the Arctic.
Russian President Vladimir Putin announced that Moscow is considering the possibility of working together with US partners in the Arctic region.
Speaking at the Gas Exporting Countries Forum (GECF) summit, Putin described the regional situation:
“We are actively working in the Arctic, which I mentioned, with many countries around the world, and we are interested in joint work. Until very recently, our European partners and our Chinese partners were working alongside us at our fields. Now we are considering the possibility of joint work with American partners.”
So, which fields could a partnership between the two countries in the Arctic encompass, and what could Moscow offer Washington in exchange for lifting sanctions on Russian gas? Liquefied natural gas (LNG) projects stand at the heart of the matter.
European companies pulled out of Russian gas projects such as Yamal LNG and Arctic LNG 2 due to sanctions imposed on Russia after 2022.
According to Igor Yushkov, an expert at the Financial University under the Government of the Russian Federation and the National Energy Security Fund (NESF) who spoke to the Vzglyad newspaper, cooperation with Chinese companies moved to a new dimension following the departure of the Europeans.
Two Chinese shareholders, CNPC and CNOOC, are involved in the Arctic LNG 2 project. Initially, both companies froze their participation out of concern over US sanctions targeting the venture.
Mikhail Vakilyan, an expert at the Institute for the Development of Fuel and Energy Complex Technologies, told Vzglyad that Beijing did not alter its policy, but rather that Chinese firms CNPC and CNOOC simply did not want to risk their access to the US dollar.
Yet, a year and a half later, the picture shifted entirely. In the second half of 2025, China began purchasing gas from the sanctioned Arctic LNG 2 facility and dedicated a standalone terminal to the project.
Furthermore, it opened a second terminal this year serving exclusively Russian LNG.
China even resumed module deliveries needed to complete the third train of Arctic LNG 2, despite having halted shipments previously.
Moscow seeks markets and turbines, offering technology for Alaska
Despite all these developments, Russia’s expectations from the US in the Arctic remain clear. Mikhail Vakilyan summarised this requirement:
“Russia needs two things: first, markets; and second, hardware. Lifting sanctions on Arctic LNG 2 and its gas carriers will bring back buyers in Japan, India, and South East Asia, eliminating the discount currently enjoyed by China as the sole customer. As for hardware, the turbines driving the liquefaction compressors at Yamal LNG and Arctic LNG 2 are manufactured by the US company Baker Hughes. Maintenance, spare parts, and modernization for these machines are blocked by US export bans.”
Igor Yushkov viewed the process through the lens of a political and economic trade-off:
“The exact same scheme seen in the diesel agreement is operating here. In exchange for easing anti-Russian sanctions and putting pressure on Ukraine, we are offering the US mutually beneficial projects and broader economic cooperation. We are showing that this cooperation can be versatile across various fields such as diesel, fertilisers, LNG, and similar sectors.”
The tangible offer Russia could present to the US in the LNG sector in exchange for sanctions relief is technological support for an LNG plant to be built in Alaska, referring to the $25 billion Polar LNG project.
Yushkov explained the card held by Russian energy company Novatek:
“Novatek possesses a technological solution applied at Arctic LNG 2 that would also suit the LNG project in Alaska. These are reinforced concrete gravity-based structures carrying liquefaction equipment; essentially floating LNG factories. Novatek has already built two such platforms alongside their equipment and established an offshore super-structure construction centre in Belokamenka. The issue is that both this centre and the Arctic LNG 2 plant itself fell under US sanctions. Therefore, in exchange for lifting sanctions at least on the super-structure construction centre, we could build such a facility for Alaska.”
According to the expert, Russia could cast the reinforced concrete platform at this centre in Belokamenka, install the LNG plant atop it, and tow it to Alaska once completed.
Because building from scratch in the Arctic itself is both costly and creates constraints regarding time and equipment transport, this method offers a much simpler solution.
Nevertheless, Yushkov warned that the plan is not finalised:
“Owing to numerous sanctions-related issues and questions surrounding the project’s economics, it is not certain this scenario will materialize; however, the Americans are still interested in our technologies for Alaska, and Russia is stating it can capitalize on this and deliver it.”
Conversely, Yushkov recalled that Russia remains the primary rival to the US, particularly in the gas sector, and that the US administration has systematically squeezed Russian gas out of the European market in recent years.
According to the expert, helping US LNG capture the market share lost by Russia is hardly a brilliant idea.
Europe’s 2027 ban, China price talks, and rare earth metals
Arctic LNG 2 is not the only Russian project that could benefit from potential cooperation with the US; a new opening could also emerge for Yamal LNG, which is unaffected by US sanctions.
The crux here is not sanctions, but the European Union’s upcoming ban on all Russian LNG shipments starting from 1 January 2027.
Vakilyan explained the approaching risk and a potential solution using figures:
“In the first half of the year, Europe took nearly the entire output of the plant, amounting to 9.89 million tonnes. In two months, these volumes will need a new route and a new buyer; a US trading company appears very well suited for this role.”
Another winner in the equation could be Gazprom, which is conducting negotiations with China for the Power of Baikal pipeline, formerly known as Power of Siberia 2.
Vakilyan said: “Cooperation with the US is Russia’s trump card in price negotiations. China has long negotiated with Gazprom assuming Russian gas has nowhere else to go; an American company in the Arctic would disrupt that calculation.”
Viewed from a wider perspective, Russia and the US share two additional points of contact: oil projects and rare earth metals.
The Vostok Oil project, which awaits the lifting of sanctions on Rosneft, is the first among them.
Vakilyan listed the other areas:
“It is impossible to make headway on the Pobeda shelf, which could not be developed since 2014, without the Americans; that site requires subsea production complexes and drilling services in icy seas, where US companies are strongest. Another issue not apparent at first glance is rare metals. The Trump administration is seeking them across the globe, and Tomtor, one of the largest rare earth metal deposits, lies in the Arctic region of Yakutia.”
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