Past, present and the future of the Ukrainian fuel sector

The origins of the fuel crisis and analysis of the viable support options during and post the Russian aggression

There are a few reasons for the current fuel crisis in the Ukraine, which reflects itself in the massive shortage of this good in the country.1 The country’s pre-aggression fuel demand (do not mistake with the Russian aggression of 2014) was mostly met by importation and only a minor share of fuel was produced nationally in Ukrainian refineries. It should be noted that the domestic fuel production was still vastly based on imported oil.

Fuel was imported from three main directions. Most of gasoline was transported from the south via Odessa – a main sea gate for the Ukrainian fuel import. This Black Sea passage is blocked now by the Russian military vessels. The other entry point for fuel imports (diesel in particular) was Belarus to the north. Similarly, Belarus ceased the import of fuel during the months preceding the onset of the current conflict. Imports from Lithuania were also affected as they were transported via territory of Belarus. Russia also supplied Ukraine with significant volumes of fuel which in the current military conflict situation between these countries has come to an end as this route is blocked. European Union countries predominantly from the west of Ukraine also provided fuel, but like the Ukraine domestic fuel production these volumes were never substantial. Additionally, the recent missile attacks on the remaining Ukrainian refineries and fuel storage facilities have resulted in internal production also needing to be replaced with imported fuel.

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