Thread by @khodorkovsky_en

A fuel crisis keeps spreading across Russia.

I ran the country's largest oil company. Let me explain what is actually happening — and why the Kremlin cannot stop it. 🧵[1/12]

Among the plants now burning are the Samara refineries I was once directly responsible for. Watching them burn is painful. But unlike some of the affected, I remember perfectly well who started this war and who is actually continuing it.

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Ukrainian drones are hitting practically every major refinery in the European part of Russia, with only the small "teapot" plants near the North Caucasus spared. I thought the Moscow refinery would be covered by air defense — turned out even that wasn't the case.

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By volume this is not yet a catastrophe. Refining output is down by roughly a quarter, which in monthly terms means hundreds of thousands of tons. Russia could buy that fuel abroad and bring it in. The breakdown is in logistics and decision-making.

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Moving fuel across a country this size means pipelines, rail tankers, trucks, state reserves, company stocks. Someone has to decide what goes where, and quickly.

This is what is failing. Shortages have reached Chita and Irkutsk, thousands of kilometers from the front.

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The Kremlin has two ways out:

1️⃣The market way: free the prices.

In a dozen or so regions fuel jumps to something like $5 a liter, demand collapses, supply flows in because shipping it pays, and in three to five months things settle. The regime cannot afford that picture.

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2️⃣The administrative way: companies move fuel between regions themselves

That means booking rail capacity and coordinating with each other, and the state would have to help organize it. It no longer knows how. The qualified people left, scattered, or refuse to touch this.

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The government chose the third: cutting fuel quality standards to Euro-2. There is room below even that: you can pour chemistry into straight-run gasoline and sell it. It destroys the catalytic converters of modern cars — in the Kremlin's arithmetic, a small price.

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After every strike, repair crews do the impossible to bring capacity back. I cannot even imagine what those brigades are pulling off right now. But patches accumulate, and at some point a plant fails outright.

The Moscow refinery has already been stopped completely.

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If the strikes continue and half of European Russia's refining stops completely, no games with the product will cover the gap. That is real trouble—and harvest season is approaching. Remember: today the crisis is about gasoline, the harvest runs on diesel.

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No Ukrainian drones have done as much damage to the Russian economy as Russia's own government. The war handed the FSB more power: their answer to every problem has been to 'tighten the screws', crackdown even more.

The economy worsens, they attribute it to the enemy action and tighten again, and the spiral continues.

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The drone attacks exposed the weakness, the Kremlin's own response is what spreads it across the country.

Follow to see what's behind the headlines on Russia.

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