Putin's energy fix for drone-hit Russia: Dig up more coal

Russian President Vladimir Putin.Maxim Shemetov/ReutersUkraine's drone strikes on oil refineries are triggering fuel crises in parts of Russia.Russian President Vladimir Putin has touted coal to offset gas shortages and a strained energy system.Fuel shortages and economic fallout impact Russia's infrastructure and wartime finances.Parts of Russia are in the midst of a fuel crisis as Ukrainian drone strikes hammer refineries. President Vladimir Putin has a solution: coal."There is a fairly large amount of coal of various classes, which will last for almost a thousand years, all coal reserves will last for 900 years," Putin said last Thursday at the Eastern Economic Forum in the city of Vladivostok in Russia, according to state media.He acknowledged Russia's energy system is under strain."We know that in general the situation with energy is being resolved, but there are many issues that require special attention: For example, we are facing a gas shortage, we do not have connections between the various components of the energy infrastructure, and our grid economy requires development," Putin said.His comments came amid fuel shortages in Russia's Far East following Ukrainian drone attacks that have damaged oil refineries and forced production offline in recent weeks.Strikes on 10 plants have disrupted at least 17% of Russia's refining capacity — equal to 1.1 million barrels per day, according to Reuters' calculations in late August.The impact is increasingly visible. Fuel has vanished from gas stations in cities including Vladivostok, with drivers waiting hours in line or relying on ration cards amid the summer travel season, according to local media.Wholesale gasoline prices have surged as much as 50% this year, even as global oil prices remain under pressure from abundant supply.The economic fallout is also squeezing the Kremlin's wartime finances — and Moscow's financial backbone.Oil producer Rosneft posted a 68% drop in profit in the first half of 2025. In July, state oil and gas revenues fell 27%, pushing the federal budget deficit to 3.7 trillion rubles, or 1.7% of GDP, in the first six months of the year.The fallout extends beyond the energy sector.Mobile internet blackouts — part of Russia's drone defense strategy — have disrupted payments, delivery services, and ride-hailing platforms. The central bank has said more Russians are pulling cash from banks as digital transactions stall.Mounting pressure on Russia's infrastructure is likely to get worse, wrote David Kirichenko, an associate research fellow at Henry Jackson Society, a UK-based think tank."If Ukraine sustains this tempo, the crunch will deepen as autumn agriculture and winter heating push demand higher," Kirichenko wrote in a Monday post for the Lowy Institute."Repeated strikes on the same plants slow repairs. The most vulnerable processing units require specialized equipment that few countries produce, which makes rapid replacement unrealistic," he added.Read the original article on Business Insider

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