Published on August 18, 2025, 3:02 PM EDT – Key Points and Summary – Recent Ukrainian drone strikes on major Russian oil refineries have caused domestic wholesale gasoline prices to soar to historic highs, creating a potential shortage despite a gasoline export ban.
-The attacks, which have knocked out key facilities, are compounding the pressure on Russia’s energy-dependent economy.
-This comes as the U.S. prepares to impose a 25% secondary tariff on India, a major buyer of Russian crude.
-White House trade adviser Peter Navarro has accused India of acting as a “global clearinghouse” that helps fund Putin’s war machine, signaling a multi-pronged economic assault on Russia’s primary revenue stream.
Ukrainian Drones Just Sent Russian Gas Prices to ‘Historic Highs’
Throughout the war between Russia and Ukraine, oil and energy have played an outsized role. The U.S. and the European Union have placed sanctions on Russian energy on several occasions, with Trump imposing secondary tariffs on Russia’s oil partners earlier this month.
Also, at various times, energy supplies have been disrupted. That happened again this week, when a “wave” of Ukrainian drone strikes struck Russian refineries.
According to The Moscow Times, wholesale gas prices in Russia have “soared to historic highs” this week, following the drone attacks.
“The benchmark price of AI-92 gasoline on the St. Petersburg International Mercantile Exchange climbed to 71,500 rubles ($890, according to spot foreign exchange market data published by Reuters) per ton on Monday, while AI-95 reached 80,430 rubles ($1,000) per ton. The prices rose by 1.3% and 2.2% in a single day, respectively,” The Moscow Times reported.
“AI-92 has jumped 38% and AI-95 nearly 49%” since the start of 2025, the Moscow Times report said.
“The surge comes after attacks this month knocked out operations at three major refineries: Rosneft’s Novokuybyshevsk plant on Aug. 2, its Saratov plant on Aug. 11, and Lukoil’s Volgograd refinery — the largest in southern Russia and one of the country’s top 10 producers — on Aug. 14,” the report said.
Russia has imposed a ban on gasoline exports, which was first to run through the end of August, but was later expanded into September
How Much Will It Hurt?
Per a Reuters report earlier this month, Russia “could face gasoline shortages in August despite an export ban, as low domestic stocks, peak seasonal demand and repair work at domestic refineries affect the market.”
“Yet traders say it will likely not be enough to balance the market, as gasoline export volumes are far smaller than domestic consumption and will do little to satisfy demand even if diverted to the local market.”
Russia’s Share of Oil
According to a chart from the U.S. Energy Information Administration, as of 2023, Russia was the third-largest producer of oil in the world, producing 10.75 million barrels of oil a day, for 11 percent of the world’s total.
The U.S. is the world’s leading producer, with 22 percent, with Saudi Arabia and Russia each making up 11 percent. They’re followed by Canada, China, Iraq, Brazil, the United Arab Emirates, and Iran.
The U.S. is also the world’s top oil consumer, followed by China, India, Russia, and Saudi Arabia.
What About Those Secondary Tariffs?
The deadline, last week, for Russia to declare a ceasefire to avoid secondary tariffs, was quickly overshadowed by Donald Trump’s meeting with Vladimir Putin in Alaska last week, and Trump’s subsequent sitdown on Monday with Ukrainian President Volodymyr Zelenskyy.
However, the tariffs on India indeed remain on track, with a 25 percent tariff on all goods set to go into place on August 27.
“India acts as a global clearinghouse for Russian oil, converting embargoed crude into high-value exports while giving Moscow the dollars it needs,” White House trade adviser Peter Navarro wrote in an op-ed for the Financial Times.
“Here’s how the India-Russia oil mathematics works. American consumers buy Indian goods,” Navarro, known as one of the Trump Administration’s leading trade hawks, wrote for FT. “India uses those dollars to buy discounted Russian crude. That Russian crude is refined and resold around the world by Indian profiteers in league with silent Russian partners — while Russia pockets hard currency to fund its war machine in Ukraine.”
Meanwhile, according to a New York Times analysis published Monday, “a big part of India’s economy is facing a nightmare scenario.” And it’s not only oil- the carpet-making sector is also facing potential trouble from the tariffs.
“Other industries in line to face unbearable wipeouts include textiles and garments, aquaculture — mainly farmed shrimp — and furniture. They are not India’s flashiest businesses, but together they employ many millions of workers, and the billions they earn have helped keep India financially strong during periods of crisis,” the Times said, reporting from India.
About the Author: Stephen Silver
Stephen Silver is an award-winning journalist, essayist, and film critic, and contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review, and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. For over a decade, Stephen has authored thousands of articles that focus on politics, national security, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter.
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