00:00Currently, Russia is running out of fuel. One of the world's largest oil producers,
00:03Russia is now facing a fuel shortage. But soon it will be winter.
00:08Currently, Russia is fighting a war over oil. The Ukrainian military has changed its strategy
00:13and is actively using long-range drones to attack Russia's oil refineries.
00:17Russia's refining capacity has fallen by up to 45%, causing the worst fuel shortage since
00:22the Soviet Union's collapse. To give you an idea, the Ukrainian military has attacked almost every
00:27oil refinery, except for the Angarsk refinery in Irkutsk, Siberia. So far, all but the Angarsk
00:32refinery among Russia's top 10 oil refineries have been attacked. As a result, Russia faces a severe
00:38fuel shortage since major refineries have been shut down for weeks or months. Also, due to the fuel
00:43shortage, 35 regions in Russia have taken measures such as raising public transportation fares or
00:47reducing routes. Currently, you can see countless lines at gas stations across Russia. Restrictions
00:53on gasoline sales per person have already been implemented throughout the country.
00:56They have also imposed a ban on the export of gasoline, diesel, marine fuel, and gas oil until
01:02January 31, 2027. For gasoline, the ban on overseas sales applies to all exporters, producers,
01:08non-producers, and intermediaries, and lasts until the end of January next year.
01:12The Russian Ministry of Energy said the cabinet approved a plan to allow production, distribution,
01:17and import of Euro 2, 3, and 4 grade gasoline until July 1 next year. What these Euro grades mean
01:23is
01:23that the lower the number next to Euro, the more air pollution and pollutant emissions there are.
01:27So it's low-quality gasoline. Since 2016, the Russian government has maintained the Euro 5 grade,
01:33which limits sulfur content to less than 10 meter per kilogram. But now, due to fuel shortages,
01:38they are in a position where they have to allow lower-grade gasoline as well.
01:41It's also worth noting that Russia has started directly purchasing gasoline from overseas due to
01:46the shortage. Reportedly, Russia is importing gasoline from countries like India, Kazakhstan,
01:51and Morocco. It's quite unusual for Russia, a major oil-producing country, to import large amounts
01:56of gasoline from overseas. The volume imported from India is especially notable. According to Kapler,
02:03which analyzes ship movements, about 42,000 tons of gasoline that departed from the Vadinar refinery
02:07in India, on July 26, arrived at the terminal in Beloyimul, northern Russia. This was the largest
02:13single shipment of gasoline imported by Russia. This means that Russia is securing large quantities
02:19of refined oil products from overseas to make up for the production shortfall at its domestic
02:23refineries. However, there is something even more unusual about this transaction. The Vadinar refinery
02:28is owned by India's Nayara Energy, but Russia's state-owned oil company, Rozneft, holds a 49% stake in it.
02:35Surprisingly, over 90% of the crude oil processed at this refinery this year came from Russia.
02:41Crude oil produced in Russia is transported to India, refined into gasoline, and then the gasoline
02:45produced in this way is shipped back to Russia. This import is quite significant, not because Russia
02:50lacks crude oil itself, but because production disruptions at domestic refineries have made it
02:55necessary to bring in refined fuel from abroad. This means that the Ukrainian military's attacks have
03:00started to be effective. Even President Putin of Russia has acknowledged the current fuel shortage
03:05happening in Russia. President Putin stated that Russia is experiencing a certain level of fuel
03:09shortage. However, he did not see this as a crisis that could shake the national economy.
03:14President Putin said the fuel shortage is temporary and won't significantly affect Russia's economy.
03:20The Russian government wants to avoid a prolonged economic crisis and rising public anxiety,
03:26so they're explaining the situation's seriousness only to a limited extent. However,
03:31the important change is that the fuel shortage is now becoming a problem that the Russian people
03:35can actually feel in their daily lives. Previously, many citizens saw the war in Ukraine as distant
03:41from their daily lives. Although battles on the front lines, long-range missile, and drone attacks
03:47continued, not all Russian citizens were directly affected by them. However, ongoing attacks on oil
03:52refineries and fuel supply disruptions are changing the situation. As it becomes harder to get fuel at gas
03:58stations and even sales restrictions are being implemented, the impact of the war is entering
04:01the daily lives of the people. In this situation, it is also important to pay attention to changes in
04:06President Putin's approval rating. According to a pro-government public opinion poll, the Russian
04:10Public Opinion Foundation conducted a face-to-face survey of 1,500 adults from July 10th to 12th.
04:16The results showed that 66% of respondents evaluated President Putin's job performance positively.
04:21In the previous survey, it was 71%, so it dropped by 5 percentage points in just one survey.
04:27What is particularly noteworthy in the data is that the 66% figure is the lowest level since
04:33Russia's invasion of Ukraine in February 2022. Of course, we can't conclude that the overall public
04:38opinion of the Russian people has changed drastically based on this figure alone. However,
04:42it is important to note that as the war drags on, fuel shortages and economic
04:45burdens have also begun to affect people's daily lives. For President Putin, how quickly he can
04:50stabilize the fuel supply issue has become an important task not only for the economy but
04:54also for managing public sentiment. Ukraine has stated that its operations over the past 40 days
04:59have been very successful. Ukraine estimates that the logistics-related losses Russia has suffered
05:04from these operations amount to $12.2 billion, or about $17 trillion won. The Ukrainian military
05:10targeted not only oil refineries, but also at least 20 Wildberries facilities and logistics warehouses
05:15across Russia, including Kotovsk, St. Petersburg, and Perm. Wildberries is Russia's largest e-commerce
05:21platform with over 80 million monthly users. It is directly harming Russian consumers. Some experts
05:28believe this operation targeted the Russian general elections in June. By attacking oil refineries and
05:33logistics warehouses, Russian citizens are now directly feeling the war's economic and social effects.
05:38However, the real challenge begins as Russia soon faces winter. Russian winters bring much colder
05:42temperatures, causing a sharp rise in energy demand for heating and transportation across the vast
05:47country. In regions like Siberia and the Far East, which rely heavily on long-distance transport,
05:52fuel supply disruptions can have an even greater effect. In winter, a significant amount of fuel is
05:57needed not only for people to get around, but also to operate heating facilities, transport food and daily
06:02necessities, and carry out various snow removal operations. The important thing here is that it's not just a
06:08problem with gasoline. Diesel fuel also plays a very important role in Russia's logistics and industrial
06:13sites. Trucks and various transportation equipment need to operate properly for goods to move between
06:17cities and regions, and in winter, fuel is also needed to operate snow removal and heating-related equipment.
06:23If fuel is low and demand rises in winter, the Russian government may have to decide where to send the
06:29limited supply first. If the fuel shortage continues into winter, fuel may be prioritized for the military and
06:35strategic industries over civilian transportation. If the Russian government prioritizes fuel supply to
06:40maintain military operations and the operation of key national facilities, the shortage felt in the
06:45civilian sector could become even more severe. However, maintaining civilian supply could strain fuel
06:50resources for the military sector. Although we cannot yet conclude that Russia has entered such a
06:55situation, as winter approaches, how long the current fuel shortage lasts could become a very important
07:01variable. There is one crucial point here. Just because Russia's oil refineries were attacked doesn't
07:06mean damaged facilities can return to normal in just a few days. Since oil refineries have multiple
07:11processes connected in sequence, if a particular piece of equipment is seriously damaged, simply replacing that
07:16piece of equipment may not be enough. Since units that heat and separate crude oil, refining facilities,
07:21compressors, pumps, pipelines, power, and control systems are all interconnected, an issue in one area can
07:27impact other processes too. Especially if a drone attack destroys a key facility, the recovery process
07:33can take a long time. First, the exact extent of the damage must be assessed, and after dismantling
07:38the damaged equipment, it is necessary to determine which parts need to be replaced. After that, you need
07:44to secure and install the necessary equipment and parts, and then test each process step by step to make
07:48sure everything is working properly. Large equipment used in oil refining facilities cannot be purchased
07:53immediately like parts used in regular factories, so the process of securing the necessary parts itself
07:58can extend the recovery period. Additionally, Russia being under Western sanctions is another
08:02factor. Some advanced equipment, technology, and control systems needed for oil refineries rely on
08:08overseas supply chains, making it unlikely that Russia can quickly source all needed parts domestically.
08:13Russia's producing equipment locally or sourcing it from other countries, but securing, installing the
08:19equipment and resuming normal production takes time. There were predictions that after the June attack,
08:25the Moscow oil refinery would struggle to quickly restore its damaged facilities. Industry insiders
08:30think it may take at least six months to restart some facilities. This means that the impact of
08:35attacks on oil refinery facilities does not end on the day the drones arrive, but can affect production
08:40capacity for several months afterward. The bigger problem is that Russian oil refinery facilities could
08:45continue to be attacked even during the recovery period. Oil refineries can't relocate like Starcraft
08:50command centers. They must stay put. The key point is the Ukrainian military will likely continue
08:55targeting them. That's definitely possible. Also, as Russia repairs one oil refinery, attacks on refineries
09:02in other regions could cause new losses greater than the restored production capacity. If that happens,
09:08Russia will struggle to quickly restore production by repairing damaged facilities individually.
09:15The United States will fall into the northern countries. I use the central divide-up
09:15of the Government and the United States which will continue to market through the
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