Petrol shortages and ‘oil rain’ bring Russia-Ukraine war home to Moscow

Key Points:

• Ukrainian strikes on Russian oil infrastructure have caused widespread fuel rationing across 53 Russian regions, including major cities Moscow and Saint Petersburg, with petrol stations imposing strict purchase limits.
• Russia's oil production dropped below target in May, partly due to damage from Ukrainian attacks, leading to production cuts and increased imports of refined petroleum products from Asia.
• Ukraine successfully targeted key Russian refineries, including the Moscow Oil Refinery and TANEKO refinery, disrupting fuel supplies to airports and military forces, and causing significant environmental pollution.
• Russian President Vladimir Putin acknowledged the economic damage caused by Ukrainian strikes but claimed rapid recovery, while some Russian officials express concern over growing financial burdens and ineffective reforms.
• Despite falling tax revenues, Russia is increasing its defense budget, with military spending projected to reach 10 percent of GDP in 2024, intensifying economic strain amid ongoing conflict and international sanctions changes.