D1585: Ukraine’s ‘Hundred-Regiment Campaign’ commences, rewriting the rules with swarm tactics

A Telegram channel frequently reporting on traffic conditions at the Crimean Bridge stated that, following a Ukrainian drone strike during the night of June 25–26, the occupation authorities closed the bridge for six hours. According to the Telegram channel, a queue of approximately 2,450 vehicles formed on the Kerch side of the Crimean Bridge—vehicles departing from occupied Crimea—while no queues were observed on the Taman side entering Crimea. Those leaving occupied Crimea included Russian tourists or Crimean residents, Russian military and security personnel linked to the Black Sea Fleet, and administrative staff of the occupation authorities. This exodus from occupied Crimea may produce short-term demographic effects; if Ukrainian strikes persist, such effects could become entrenched over the longer term. Against the backdrop of worsening nationwide gasoline shortages, Russian officials continue projecting an image of economic stability and controllability. On June 26, Russian Deputy Prime Minister Alexander Novak claimed Russia currently holds sufficient fuel reserves to meet domestic demand and is restructuring fuel market logistics to cope with rising demand—though he acknowledged this restructuring would take time. Novak stated that artificially inflated fuel demand had increased domestic fuel consumption by 20–30%. He added that Russian authorities are considering imposing a short-term, several-month export ban on diesel to boost domestic supply, citing alleged diesel surpluses in Russia. Novak had previously indicated on June 23 that such a temporary diesel export ban was under consideration. On June 26, Russian President Vladimir Putin signed a decree extending the existing ban prohibiting Russian oil companies from exporting crude oil and petroleum products at prices compliant with the G7 and EU price cap until December 31, 2027. Putin first introduced this ban in December 2022; its extension amid Russia’s current fuel shortages and soaring prices likely signals Moscow’s determination to uphold its stance against Western sanctions despite ongoing economic hardship. On June 26, Vladyslav Frashuk, Ukraine’s Presidential Commissioner for Sanctions Policy, attributed Russia’s current economic crisis to declining oil and gas revenues: hydrocarbon revenues from January to May 2026 fell by 30% compared to the same period in 2025. Frashuk noted that Russia’s widening budget deficit, growing public debt, and massive defense expenditures also contribute significantly to its deteriorating economic condition. Since March 2026, Ukraine has intensified strikes against Russian oil infrastructure and logistics, impacting Russia’s hydrocarbon revenues and exacerbating fuel shortages across occupied Ukrainian territories and numerous regions within Russia itself. Against a backdrop of continuously rising demand, Ukraine’s sustained attacks on Russian oil infrastructure will likely further aggravate Russia’s supply shortages—and the Russian government will be unable to ignore them. Russian Foreign Minister Sergey Lavrov blamed the United States for the failure to reach a written agreement following the bilateral summit in Alaska in August 2025. On June 26, Lavrov stated that U.S. Secretary of State Marco Rubio’s June 25 comment—that no agreement had been reached between the U.S. and Russia, only proposals discussed at the summit—had left him (Lavrov) questioning his own understanding of the word “agreement.”

Oil embargo and fuel scarcity: Diesel shortage sends prices soaring

I. Russia Cuts Its Own Oil Lifeline—The Diesel Export Ban Triggered by Drone Strikes On July 8, President Putin chaired a government meeting where Deputy Prime Minister Novak announced on the spot: a full ban on diesel exports by Russian oil companies, effective until July 31. Gasoline and jet fuel exports were likewise prohibited, while Russia would begin importing petroleum products starting in July—a crude-oil-exporting nation forced to import refined fuels, an occurrence nearly unprecedented since the Cold War. The root cause lies not in intent but in capacity. Ukrainian drones have persistently struck Russian refining facilities on home soil: Moscow’s Kapotnya Refinery—which supplies 40% of the capital’s gasoline and 50% of its diesel—has been hit twice; multiple major refineries across Siberia have halted operations. Novak admitted that nearly 40% of Russia’s primary refining capacity is now idle or operating at half-capacity. Western sanctions have severed supply chains for precision equipment and spare parts, stretching refinery repair timelines from months to years. Aging infrastructure compounded by delayed maintenance means refined fuel output barely meets essential domestic demand. The numbers tell the story: According to Kpler, Russia’s seaborne diesel exports in June dropped to 426,000 barrels per day—the lowest since 2017—and nearly halved from 827,000 bpd year-on-year. Russia once supplied 11% of global seaborne diesel, ranking second only to the United States. That share has now been effectively erased from global markets. Since late May, fuel rationing and long queues have emerged at gas stations across multiple Russian regions, accompanied by sharp price hikes. The government has exhausted all measures: pushing refineries to maximum capacity, releasing strategic reserves, shortening maintenance schedules, and mobilizing smaller refineries—yet still declares the situation “severe.” The export ban is not a policy choice; it is the only option left. II. Diesel Shortage Spreads—Refined-Fuel Shortfalls Are More Lethal Than Crude Shortages The layperson’s intuition is: falling oil prices mean the crisis is over. But the reality of the refined-fuel market is precisely the opposite—crude oil ≠ gasoline/diesel. Global refining capacity is undergoing structural collapse; shortages of diesel and jet fuel are far more critical than crude oil shortages themselves. Global inventories have been depleted. U.S. distillate stocks (including diesel and heating oil) hover near their 23-year lows—around 100 million barrels; Northwest European diesel stocks have shrunk roughly 20% since the Iran war, leaving virtually no buffer. In June, Bruegel warned that European jet fuel stocks had fallen below 70% of their five-year average, casting a bleak outlook for summer supply. Refining margins flash red. Europe’s benchmark diesel crack spread has surged over 35%, exceeding $46 per barrel; Singapore’s crack spread has rebounded above $40 per barrel. This means profit per additional barrel of diesel produced is skyrocketing—but profitability alone cannot resolve the problem, as feedstock (Middle Eastern heavy crude) supply remains incomplete and refinery utilization rates stay low. The IEA’s June report sounded the death knell: global refinery throughput in 2026 is projected to decline by 2 million barrels per day to 82 million bpd. In Q2 alone, global throughput fell 4.7 million bpd year-on-year. Diesel demand is the largest drag, down 460,000 bpd for the year; gasoline follows, down 210,000 bpd.

Putin Announces Russia Will Halt Diesel Exports Until Sanctions Lifted

18 hours ago

Russian President Vladimir Putin announced a suspension of diesel exports to global markets until sanctions are lifted, citing refinery damage from Ukrainian strikes. This decision exacerbates global energy shortages, pushing US diesel prices to record highs above $6.50 per gallon.

reuters

2026-10-01

Putin Announces Russia Will Halt Diesel Exports Until Sanctions Lifted

Putin Announces Russia Will Halt Diesel Exports Until Sanctions Lifted

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