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• Fuel shortages in Russia and restrictions on sales

  Russian regions are restricting fuel sales due to a lack of certain grades of gasoline and diesel and long lines at the filling stations. This is because Ukrainian attacks on oil refining facilities have disrupted supply. The following are statements by Russian regional authorities and companies on the current situation: CENTRAL RUSSIA Surgutneftegaz, Tatneft and the authorities in Tver announced on the 20th of June that temporary restrictions were introduced for individuals at the Surgutneftegaz & Tatneft gasoline stations because of increased demand. Igor Artamonov, the Governor of Lipetsk, said that several filling stations in the region, including?the cities?of Lipetsk, and Yelets were suffering from shortages of certain grades. Kommersant reported that Tambov Governor Evgeniy Pryshov had imposed restrictions on the sale of cans and other containers in order to reduce panic buying. Regional media reported that authorities in the Vladimir region stated on June 21, "temporary logistics difficulties" caused long queues at fuel stations. Sales were limited to 30-60 litres of gas per vehicle. Alexander Avdeev, the Governor of Vladimir region, urged residents to limit their travel and not stockpile fuel. A regional ministry reported on June 19 that increased demand in the Kaluga region led to long queues at gas stations. It said that reserves were available and volumes are being replenished to ensure Ai-95 and Ai-92 for two weeks as well as diesel and Ai-92 for three weeks. The Kommersant newspaper reported that private gas stations in parts of Tula region were running out of certain grades of fuel, but the major networks did not have any supply problems, according to Governor Dmitry Milyayev. SOUTH AND WESTERN RUSSIA Anna Kasyanenko, the regional agriculture minister, told local media that some Rostov-region filling stations ran out of gasoline because major refineries had cut production. Local media reported that some stations in?Makhachkala have restricted gasoline sales to a maximum of 20 litres for each vehicle. Diesel is also limited to a maximum of 50 litres. CRIMEA AND SEVASTOPOL The Crimean government has suspended summer camps for children and tourist activities until September, citing fuel shortages as well as security concerns. From June 21, fuel stations in Crimea stopped all sales of fuel to businesses and individuals. Sevastopol has also imposed restrictions on fuel sales, public transport and cafes. VOLGA REGION Local media report that Tatneft stations in Udmurtia have stopped selling Ai-95. Rustam Minikhanov, the Tatarstan leader, held a meeting in June after lines formed at certain stations. Authorities have announced temporary limits to prevent panic-buying. From June 23 to 30, the Saratov Region Governor Roman Busargin has announced a temporary limit of 30 litres for each vehicle. On June 15, Governor Vyacheslav Federishchev announced that a regional network has introduced restrictions on the sale of fuel at its filling stations in?the Samara Region. SIBERIA Marina Kozharina said that on June 16th, the Irkutsk Region Minister of Agriculture was concerned about the fuel situation in the region. Irkutsk, according to Governor Igor Kobzev, had switched over to a manual system of distribution by June 22. The new system prioritizes emergency services, transportation, municipal utilities, and agriculture. On June 23, Governor Andrey Travnikov of Novosibirsk announced that there would be restrictions at filling stations. Vitaly Khotsenko, the Omsk governor, said on June 22 that similar measures will be implemented to prevent panic buying and speculation. FAR EAST Amur.life reported that authorities in the region announced restrictions on petrol sales at stations to avoid what they called "artificial panic" among the local population. Dmitry Demeshin, the Khabarovsk governor, said that on June 16, gasoline sales were restricted in Sovetskaya gavan and Vanino due to a shortage of supplies. (Reporting and editing by Milla Nissi-Prussak).

• Bousso: The quest of ROI-Gulf Exporters to bypass Hormuz is reshaping the region.

  Middle East oil producers will have to face the consequences. The Iran War exposed the dangers in relying solely on one chokepoint to export vital oil and gas. Gulf governments were left with a clear strategy imperative: diversify at all costs. A blockade by Iran of the Strait of Hormuz was long viewed as an "event of doomsday". It would never occur. Experts believed it would take a massive effort from the military and that Tehran wouldn't be willing to stop its exports. These assumptions were 'proven painfully incorrect. Iran used cheap drones and small vessels to impose a nearly airtight blockade, but continued to export its oil. The result was a global energy crisis that affected the entire region. The countries lost export revenue and had to close down 11 million barrels of oil per day (bpd), along with refineries and LNG installations. Washington and Tehran agreed to negotiate an agreement for a permanent ceasefire, but the "Hormuz Genie" can't be put back in the bottle. Future closures now pose a persistent and real risk to the region's economy and its people. As a consequence, the Gulf countries have become more dependent on alternative routes to export energy, chemicals, and fertilisers. Pipeline Dreams Saudi Arabia is the best example of how building pipelines to circumvent Hormuz can be beneficial. Before the war, Saudi Aramco, the state-owned oil company, diverted?60% (or?60 million barrels) of its oil shipments from the Gulf Coast to Yanbu on the Red Sea. In the 1980s, Saudi Aramco, the state-owned oil company, built the 1,200-kilometre (745 mile) route to protect against such a scenario. The strategic foresight has paid off. In April, the International Monetary Fund (IMF) said that it expected Saudi Arabia's economic growth to be 3.1% by 2026. This is just 1.4 percentage point less than its pre-war prediction. Qatar, on the other hand, has no alternative routes to export its oil and LNG, so its economy could contract by 8.6% this year after growing by 2.8% last year, according to IMF. Other regional players are taking note. United Arab Emirates were able to bypass Hormuz in part by using their pipeline to the Fujairah oil terminal located outside the Strait. Fujairah's oil terminal was damaged by Iranian airstrikes, but the UAE still managed to export 1.8 million barrels per day, or roughly half its pre-war production. Abu Dhabi, who left OPEC last May to pursue a growth strategy that is ambitious, has now accelerated construction of a new pipeline, which will double export capacity through Fujairah before 2027. Iraq is still in a very unenviable situation. The majority of the country's production is concentrated in southern Iraq, which makes it heavily dependent on Hormuz. Companies and authorities in Iraq are therefore looking at ways to improve and expand the northern export routes via Turkey and Syria. Security and political concerns are still major obstacles. THE QATARI CONUNDRUM Qatar and Kuwait are faced with a much more complex problem. Both countries, lacking alternative export routes on their own territory, will be forced to rely upon?neighbors to circumvent Hormuz. Qatar is the world's largest LNG exporter. For Qatar to gain access to beyond the Strait of Gibraltar, it would have to build a pipeline across the Red Sea or through Saudi Arabia, either via Fujairah, Oman or the UAE. Each option has its own geopolitical and economic complications. These projects would require the construction of new liquefaction capacity outside the Gulf region, which would drive costs up. This would leave Qatar heavily reliant on Saudi Arabia and the UAE, countries whose relationship with Doha has been strained in recent times. This poses political and strategic risks, which Qatar has sought to avoid for years. Kuwait faces a similar dilemma. To develop alternative export routes, it would be necessary to deepen energy integration with Saudi Arabia. This highlights how geography could reshape future regional alliances. DIVERSIFICATION OVERSEAS Diversification of the Middle East is not the only response that has gained traction. Gulf national oil companies have been expanding overseas operations to create a hedge for future disruptions in the region. QatarEnergy (formerly Abu Dhabi National Oil Company) and QatarEnergy have been at the forefront of building international portfolios that include oil, gas, and renewables. This trend will likely accelerate. Acquiring stakes overseas in upstream assets such as refineries, LNG installations and storage terminals would generate valuable income streams, which are not exposed to Gulf risks. Such investments are a great way to ensure that you can continue to grow and be resilient in a world without the certainty of Hormuz. The race to diversify will shake up government strategies, reshuffle alliances and redirect investments as Middle East producers start the recovery process. It could, in other words reshape this region for many decades. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.

• Sevastopol in Crimea imposes temporary electricity restrictions to households

  Sevastopol has limited the power supply to homes in order to avoid overloading the network. This is according the the Russian-installed Governor of Crimea's biggest city, who spoke on Thursday. The Black Sea Peninsula is currently experiencing fuel and electricity shortages. Crimean authorities already have suspended fuel sales for private motorists. Sevastopol, on the other hand, has implemented restrictions to operating hours of public transport, shops and cafes. In 2014, Russia annexed Crimea, despite the fact that most countries don't recognise Moscow's authority in the region. Kyiv, however, has stated it will never cede this territory. The fuel supply to Russia has been disrupted by Ukrainian attacks on energy and logistics facilities in Russia. Mikhail Razvozhayev is the governor of Sevastopol in Moscow, home to Russia’s Black Sea Fleet. He has urged people to avoid using powerful appliances. This measure was forced. He said that it was necessary to reduce the load on the power grids in other regions to avoid an accident affecting the entire energy system. He said that on Wednesday the recent Ukrainian attacks had caused a power outage. He added that trolleybuses will not be operating and parents should keep their children at home. Ukraine has confirmed that its drones have hit the main substation of the Sevastopol Power Plant. Ukraine's strategy of using?long-ranged drones to target Russian energy installations is intended to savor a major source of war funding for Russia and show the Russians that a four-year conflict launched by Moscow has hit?closer home. Vladimir Putin, the Russian president, has stated that the attacks on civil infrastructure were meant to create discord in the Russian population. (Reporting and Editing by Joe Bavier).

• Sources say that Russia is set to export record volumes of oil from its western ports in June

  As a result of the Ukrainian drone attacks, Russia will ship record volumes of crude oil from its western ports in June. Sources said that loadings at the Baltic ports Primorsk and Ust-Luga as well as the Black Sea port Novorossiysk are expected to be around 2.7 million barrels per day this month. One source said that shipments could reach as high as 2,8 million barrels per day. This would be a significant increase over the 2.5 million barrels per day (bpd) exported in May, and about 1 million above the initial forecast for the month. As a result of repeated drone attacks, several major refineries have been forced to shut down. Moscow has redirected crude oil into export channels in an effort to avoid production reductions. The outages also have put pressure on the domestic fuel supply. Several Russian regions have restricted sales, citing shortages in some gasoline and diesel grades as well as?long lines at filling station. As refinery output remains below normal levels, Russia is trying to balance the rising crude exports against the potential fuel shortages in its own country. According to traders, higher Russian exports may put "additional" pressure on the global oil price already under stress from increased Iranian supply. Recent U.S. waivers have allowed buyers in India and China to switch from Russian crude to Iranian grades. This has intensified competition on key markets.

• Sources say that Russia has asked Kazakhstan for gas to alleviate shortages.

  Four industry sources said that Russia and Kazakhstan are in discussions to import 50,000 metric tons of AI92 to alleviate a 'domestic shortage' caused by refinery failures and unscheduled maintenance. As of late June, the shutdowns at several large refineries in central Russia following Ukrainian drone attacks had reduced gasoline production by about 25% on an annual basis. The Russian Energy Ministry declined to comment immediately. Erlan Akkenzhenov, Kazakhstan's energy minister, said earlier that Astana hadn't received a formal request for gasoline from Moscow. The Russian government is considering measures for stabilizing the market. These include fuel export restrictions and higher subsidies for refiners. This is an unusual move for one of world's largest fuel exporters. In this?month, Moscow has allowed refineries in the country to produce gasoline and Diesel for the domestic market at lower quality standards. Russia is also planning to import gasoline by sea, highlighting the seriousness of the situation. Kazakhstan is a relatively smaller?fuel producer than Russia. Sources said that supplies will not be significant. Sources said that Kazakhstan has an excess of gasoline, but the maintenance work at the Atyrau Refinery between June 26 and July 20 will reduce the available reserves. Kondensat, a refinery in Kazakhstan that processes gas?condensate produced by the TANECO refinery in Russia and which has quotas on fuel exports, is one possible source. According to Kazakhstan's fuel-and-energy analytical centre, Kondensat exports 15,207 tons AI-92 and AI 95 gasoline to?Georgia by May 2026. TANECO, owned by Tatneft in Russia, halted all crude processing after a drone strike on 12 June, which could limit the feedstock available to Kondensat. According to a?source from Kazakhstan, gasoline deliveries could be made to Russia in exchange for Russian jet-fuel. According to industry sources, Kazakhstan will face a shortage of jet fuel in July because of?rising demand?, maintenance at Atyrau?and lower Russian imports. Russia, Kazakhstan and Belarus are all members of the Eurasian Economic Union. This union allows for duty-free hydrocarbons and establishes annual indicative balances in fuel trade. Reporting by. Mark Potter (Editing by Mark Potter).

• Sevastopol, in the Russian-held Crimea, is now without power after a Ukrainian strike

  Local officials reported that Ukrainian drones targeted energy infrastructure in central and southern Russia and the largest city in Russian-held Crimea. This highlights the'reach' of Kyiv’s attacks. Ukraine intensified its strikes against Russian oil refineries and depots this year, driving up the price of gasoline in Russia where authorities have restricted sales in certain regions. The fuel shortages in the Crimean peninsula have been especially acute since Russia's annexation of the peninsula in 2014. Sevastopol's newly-installed Russian governor has ordered the early closure of cafes, public transport, and street lights to protect Sevastopol from overnight attacks. He said that the power supply had been knocked out by Wednesday's storm and that there would be no trolley buses and that parents should keep their children at home. The governor of Telegram, Mikhail Razvozhayev said that work was underway to restore supplies, even though Kyiv "tried to deprive [us] of our normal living condition and sow panic." DRONES DOWNED OFF THE SOUTHERN SIDE Robert Brovdi, commander of Ukraine's drone force, said that drones hit the main substation in the Sevastopol?plant. Crimea is not recognized as Russian territory by many countries. Kyiv says it will never cede the peninsula. Gleb Nikitin, the Governor of Nizhny Novgorod in central Russia, said that falling Ukrainian drone debris destroyed an industrial facility there and killed two people. He said that the unspecified facility had not been damaged in a critical way. NORSI is the fourth largest oil refinery in Russia. It's one of several large oil plants located in central Russia which temporarily stopped or reduced production in May after drone attacks. The Russian Ministry of Defence reported that its air defences shot down 323 drones in various regions of the country overnight. Orenburg, a region in Russia located more than 1,000 km (621 mi) south of Moscow, has reported that drones were shot down over an industrial site. The extent of damage in this remote area, which borders Kazakhstan, is not clear. It is home to several industrial facilities including an oil refinery and a gas processing facility. The Kazakh energy ministry stated that gas is being supplied via alternative routes. Ukraine's strategy of using long-range drones to target Russian energy installations is meant to sapper a major source of war funding for Russia and show Russians that the four-year old conflict started by Moscow is not far away. The Russian President Vladimir Putin accused Kyiv on Tuesday of trying to destabilise the Russian society, and said that the Russian government will implement additional measures to counter the effects of the strikes. Both sides claim they don't target civilians, but Russian attacks in Ukraine have killed thousands of civilians and also caused fatalities in Russia. Local authorities reported that a Russian shelling on Wednesday killed a person in Balakliia, an eastern Ukrainian city, in Russia's border region of Belgorod. Could not independently verify details of the recent strikes. Reporting by Alessandra Prentice, Jekaterina Gólubkova, and editing by Jamie Freed; Andrew Osborn; Philippa Fletcher

• Nord Stream 2 pipeline owner sues EU over Russian gas ban

  A public document revealed that the owner of the Gazprom controlled Nord Stream 2 pipeline has filed a lawsuit against the European Union at the second highest court in the bloc, attempting to overturn the EU's phase-out of binding gas imports from Russia. In response to Moscow's invasion of Ukraine in 2022, the EU passed a law requiring all Russian gas imports to cease by late 2027. This would cut off all ties with Europe’s former largest supplier. The ban prevented the revival of the Nord Stream System - two double pipes under the Baltic Sea built by Russia's Gazprom state-controlled company to deliver 110 billion cubic meters of gas to Germany annually. Both structures were damaged by an explosion that occurred in August 2022. Russia accused Ukraine of the attack. Kyiv denied any involvement. Nord Stream 2 AG (the Swiss entity that owns a pipeline of the same name) has filed a suit before the EU General Court to overturn the EU ban. They claim that the EU ban is effectively securing the pipeline. Gazprom owns Nord Stream 2 AG. The applicant argues that the regulation essentially denies it the ability to use its pipeline commercially. The lawsuit stated that this is de facto expropriation, without compensation. Gazprom didn't immediately respond to an inquiry for comment. Both the European Parliament's and the Council of the EU's spokespeople declined to comment on the lawsuit. Nord Stream 2 is completed. However, Germany halted it just before Russia invaded Ukraine. The pipeline never began to operate. Nord Stream 1 has been delivering gas to Germany since more than a decade. The EU enacted its Russian gas embargo using a law which?required the approval of a strengthened majority of EU member countries. This was done to override?opposition by Hungary and Slovakia. Nord Stream 2 AG argued in its lawsuit that the Russian gas embargo was a sanction like measure that required approval from all EU member states. The lawsuit was filed on April 27th and published last week in the official journal of the EU. After the explosions, only one of the four pipelines - a part of Nord Stream 2 - remained intact. This month, Russian President Vladimir Putin stated that the pipeline could begin pumping gas "tomorrow." Before 2022, the EU will import around 40% of its gas. This dropped to 13% in the last year. (Reporting and additional reporting by America Hernandez, editing by Philip Blenkinsop & David Gregorio; Additional reporting by Kate Abnett)

• TotalEnergies CEO: We must invest in Gulf pipelines so as to avoid Hormuz.

  By America Hernandez PARIS, June 23. CEO Patrick Pouyanne told an energy conference held in Paris that TotalEnergies must 'prioritise' the construction of pipelines to?export gas and oil?from the Middle East without having to send ships through the Strait of Hormuz. Pouyanne was asked to share his lessons learned over the past three-months of the Iran crisis, as Total is the major oil company most exposed to the Middle East. The Iran war has crippled the waterway that carries a fifth of the world’s oil to global markets. "The Strait of Hormuz is a real threat. We must act." "There is only one way to ensure that it does not remain a danger: we must invest into pipelines in order to bypass the Strait of Hormuz, this is our absolute priority," said he. Pouyanne also mentioned other export routes through Syria, Abu Dhabi and Iraq. Pouyanne explained that if you were in Iraq, and needed to reach the sea you could either go through Kuwait or Saudi Arabia or head towards Syria or Turkey. He said that Total found oil in Iraq in 1929 and built a?Iraq to Syria pipeline in just six years. The?world's biggest tanker of the time transported the oil across the Mediterranean, to a refinery in southern France. He added, "If our predecessors were able to do it 100 years ago, I think we should be able to do it again today."

• The PM has announced that Poland will be adding a second LNG vessel to the Gdansk floating terminal.

  The Prime Minister Donald Tusk announced on Tuesday that Poland will build a floating LNG terminal in Gdansk with a second regasification vessel. This is due to the overwhelming interest of shippers. "The commercial interest is large enough for the project to not require budget involvement," Tusk told reporters before a cabinet meeting in Warsaw. The two terminals in the Baltic, along with a portfolio of LNG contracts, will allow Poland to become a hub of fuel deliveries from the U.S. Gaz-System, the Polish gas pipeline operator, will be able to move forward with the project due to the interest from the market. According to 'the company plans', the second floating storage and regasification?unit (FSRU) will have a technical capability to regasify a?additional 4.5 bcm (bcm ) of gaseous?fuel per year. Gaz-System has begun construction of an LNG terminal in Gdansk, with a capacity of 6.1 billion cubic meters of gas a year. (Reporting by Marek Strzelecki, Anna Wlodarczak-Semczuk and Pawel Florkiewicz)

• Sources say that the premiums for Russian ESPO blends are now near parity with ICE Brent in China due to weak demand.

  Three?trading'sources' said that the Russian Far East ESPO blend crude differentials to be delivered to?China between July and August have fallen to parity with ICE Brent. This is due to weak Chinese demand, as well as expectations of a higher global supply after a??U.S.Iran peace agreement. India, the second largest buyer of Russian crude, is also seeing a softer price trend. This further reduces Moscow's revenue, which was already being squeezed by lower oil prices. The U.S. waiver of Iranian oil could push ESPO blend differentials to a discount compared to the ICE benchmark in China. According to one source, Russian oil suppliers stopped offering on Tuesday after the announcement. Sources said that cargoes for delivery in July-August are trading at parity with?ICE Brent or at a slight premium of less than $1 a barrel delivered into Chinese 'ports. Some June-July cargoes sold at discounts to benchmark Brent. However, traders said that this was a small percentage of all transactions. After refining losses caused by high oil prices and low demand, several teapots located in China's main oil-refining hub of Shandong Province, scheduled maintenance for June or July. Shandong Yulong Petrochemical - a major Russian oil purchaser - shut down one of its crude?units for maintenance about two weeks back. The shutdown of the 200,000-barrels-per-day crude unit is expected to last around ?a month. Two traders said that the average operation rate for Shandong teapots has dropped below 50% in recent weeks, to its lowest level this year. Teapots' profit margins have also increased, largely due to the sharp fall in Brent prices. Local consultancy Oilchem estimated Shandong independent refining companies' average profits at 126 Yuan ($18.58). The company had been losing money for the last two months. Despite lower prices, ESPO blend?export volume remains robust. It has been above 1 million bpd most of this year according to traders and shipping data.

• The Ukrainian Economy Ministry proposes a 30% increase in rail freight rates

  The Ukrainian economy ministry has proposed to increase state railway 'Ukrzaliznytsia ''s freight rates by 30% starting August '1'' in order to stabilize the company's finances. However, steelmakers and farmers have warned that this may make them less competitive. Rail remains an important part of Ukraine’s logistics network. It carries both freight and passengers. The government is under pressure to increase its cash flow as it tries to restructure debt. Ukrzaliznytsia's CEO Oleksandr Ptsovskyi said this month that his firm must?increase its tariffs this year by at least 45 percent to restore its finances. In a weekend note, the economy ministry stated that the proposed increase of 30% is expected to generate more revenue for Ukrzaliznytsia and to increase the financial capacity of the company to partially cover its funding shortfall by 2026. The Ministry will consult with the industry, but it has?the right to implement an increase on its own. The company described the tariff increase of 30% as a "compromise", however, steelmakers and agricultural producers were against the rise in freight rates. They said it could reduce their competitiveness on foreign markets. Pertsovskyi stated that an increase of 45% in tariffs would cover approximately half of the projected cash shortage for the company, which is $587 million. In the note, the ministry did not indicate whether additional tariff increases would be possible to reach "the 45% level". Ukrzaliznytsia stated that a decision regarding a future tariff increase starting January 1, "will be taken separately." Even with a higher rate, it's not enough Rail company says that the increase in tariffs alone would not be enough to stabilize its finances. However, if it is approved, it will allow it to resume support from international financial institutions and introduce additional optimisation measures. Ukrzaliznytsia said that the new tariffs will only increase the transport costs by a small amount - $3.2 per metric tonne?of ore, and $3.6 per tonne of grain when transported along the full route of up to 466 miles (750 km). The planned tariff increases were opposed by major shippers, who claimed that the increase could threaten 300,000 steel industry jobs and lead to the closing of key companies. The agriculture and metallurgical sectors in Ukraine, among others, say that the rate increase would be a major competitive disadvantage to Ukrainian exporters, at a time when the country is desperately trying to maintain industrial output, exports and jobs, as well as foreign currency revenue. (Reporting and editing by Thomas Derpinghaus and Alexandra Hudson.

• Draft order from Ukraine's Economy Ministry proposes a 30% increase in rail freight rates

  The Ukrainian economy ministry announced over the weekend that it would be increasing rail freight tariffs by 30% on August 1st to help stabilize the financial position of the state railway Ukrzaliznytsia. The war against Russia is now in its fifth and final year. Railways are still a crucial part of Ukraine's logistic network, transporting both passengers and freight. The government is under pressure to reduce its debt because of increased spending on infrastructure and security. Ukrzaliznytsia's CEO Oleksandr P. Pertsovskyi said?this month the firm had to increase their tariffs this year by at least 45% in order to help restore its finances. The ministry stated in a statement that the implementation of the order would increase the financial capability of Ukrzaliznytsia to partially cover the funding gap in 2026. A higher rate would help reduce the company’s funding?shortfall by 2026, and partially cover its funding gap of 191.50 million hryvnias in 2026. Pertsovskyi stated that a 45% increase in tariffs would cover about half of the projected cash shortage for the company, which is $587 million. In the note, the ministry didn't specify if further tariff increases would be planned to reach the 45% threshold. Major shippers have opposed the proposed tariff increase. They said that it would threaten 300,000 jobs and force the closure of important enterprises. (Reporting and editing by Thomas Derpinghaus; reporting by Pavel Polityuk)