The Duran Podcast - Russia fuel shortages explained w/ Stanislav Krapivnik

Episode Date: September 1, 2025

Russia fuel shortages explained w/ Stanislav Krapivnik

All right, Alexander, we are here with Stanislav, once again, on the Duran, and we're going to talk about what's going on in Russia with the fuel shortages, the talk that there are fuel shortages, and the Russian economy is in big trouble this time around. Anyway, Stadislav, where can people follow your work? You can follow me on X under Stascarpivnik. You can follow me in YouTube at Slavicman.com. I'm sorry, I just at Slavic man, that's Slavic with a K-N-R-C. On Telegram, my Russian channel is Stas-Taday-A-Bratna,

and my English-language channel is Stas was there. And I'll try to make up something else and somewhere else to post it additionally, but that's all so far. All right, I will have those links in the description box down below, as well as a pin comment. So, Alexander Stanislav, let's talk about the tatters that is the Russian economy and the Russian fuel. situation. Indeed, because there's all over the media here in London. And the story, the narrative

that has been circulated here is that Russians are running out of petrol, that there's enormous shortages of petrol right across Russia, that there's a crisis. And this is all the result of the Ukrainian drone war on the Russian refineries, that the drones are destroying the refineries, and that's creating a massive petrol shortage across Russia. And this is a crisis for Russians, for Russia, for the economy, and for Vladimir Putin as well. Now, you are there, you are in Russia. You're somebody who's worked in the oil industry, I believe. Tell us what the actual situation is.

Well, they are partially correct. As they say, in every legend, there's a grain of truth. And then in this legend, there is a grain of truth. there have been hits on refineries. Now, let's begin with the fact that Russia is a major exporter of refined petrol chemicals, i.e. fuel, plastics, different types of fuels, and it exports to a very fungible market in the world. So, yes, there's that, there have been hits, and there's no denying that. and that has lowered

manufacturing by about 14%. Now, having said that, Russia has more enough for itself. The problem is that 14% is what goes on export. And when that goes on export, and Russia traditionally around August starts having a bit of a problem because that's the mass migration back to, from the vacation season,

that really started, about the second week of August and goes up to the very beginning of September because school starts for September. So all these families are heading back north or north east, trade east. So, of course, you get lines at the petrol stations because everybody's heading in the same direction. You get insane traffic in it. Considering the M4 is a four-lane road, high-speed interstate that is being expanded. They're now building an extra lane.

a lot of it to make it a six-lane road. And it gets backed up. Because invariably, you also get traffic jams. You also wind up with somebody getting in the fender bender or worse. And then you get jams. So, yes, there's a lot of people. The videos are coming out, by the way, are not from the M-4. None of what they're saying.

They're not from M-4. They're from some either a parallel country road or some other small highway. Actually, you can see by the road themselves. And a lot of truckers, they'll take the extra, the parallel highways to avoid paying the fees for the toll road. And the M4 is a toll road. So there's that. And if it's a small petrol station somewhere in some village, yeah, they'll run out a lot faster. But what hits, you know, and by the way, there's been an incident.

There's been an incident in Estonia, which is basically, if you look at it, it's almost a declaration of war. There's been a large drone, airplane-type drone, that fell in Tatu County, which is about central Estonia. Estonia is not that big. And blew up. And amazingly, the Estonians didn't scream. Oh, it's the Russians. And the reason they didn't scream is because the drone either lifted off from Estonia or was flying through Estonia toward the Russian infrastructure, which is a flat-out admission that either Estonia is directly participating in direct military confrontation with Russia. Or it's allowing its airspace to be used and its territory to be used by Ukrainians to do the same.

So in other words, it is a direct participant of this conflict, no matter how they spin it. Cali-Chalis may not, her husband may not be making as much money anymore with his business in Russia, which is, by the way, where he made his millions. For some reason, people don't even realize how deep her family actually is. Fortune is directly sponsored by Russia or the Soviet Union before that. Yeah. Go on. It's focused on the on the petrol system.

Yeah. So the petrol, their beginning of August, there was a ban on export. And remember, the military uses diesel. It doesn't use, it doesn't use gasoline. This is all, everything's diesel driven. So there was a ban on exports, and that hits what? that hits the number one importer in the world, and that would be the EU. So prices going up because there's less supply on the market.

Prices go up. It doesn't matter where you're buying. It's a fungible goods, so it gets shipped in every direction from every country that produces it. And it hits the EU. There's also a double hit for the EU this year. And a lot of people are, again, celebrating because, I mean, this is stupidity. But nature is what nature is. In southern Russia, there was a drought.

And in northwestern Russia, there was a very rainy summer. I mean, we had two months of rain, basically, this summer. So in the south, there was a loss of crops at about a billion U.S.D. So about 80 billion rubles. Corn, mainly wheat, and so on. And Russia is the biggest wheat producer in the world. I'm sorry. It's the third largest wheat producer in the world, produced about twice as much wheat as the U.S.

and is the biggest exporter of wheat in the world. It also exports sugar beets, other different grains, rice, etc. And again, people in the West were jumping up and down. Yeah, the Russia economy is collapsing. Well, Russia has more than enough to feed itself, and any cuts that happen are going to be on what goes to export, and exporting Russian export. And Ukraine, by the way, what land is still in use for farming

was also suffering from the same droughts. So that's a double hit. And again, who's going to suffer? It's going to be the EU that suffers because prices are going to go up. So they're going to have a double whack. They can scream and the holler and they can celebrate all they want. But that's also going to be a very limited celebration. And again, we also had the mass refugee crisis, the vacationers leaving Crimea.

And that's usually portrayed as everybody's running for Crimea from the great Ukrainian army. It is not unusual for people in Russia to go on holiday in the summer, for there to be massive stresses on petrol stations in the summer, that this is a recurring phenomenon, that it happens every year at around this time, and that it is not unusual for it is not surprising that a Russian government that is concerned about inflation would want to keep gasoline prices low by restricting exports.

And this is not the first time that this has happened. I can remember other years when they have done the same. That's what I wanted. And I just wanted your comment on that. Absolutely. You know, up here in Moscow and the Moscow region, the Moscow province, prices on Petro have gone up about one ruble per liter. I mean, they've gone up overall over the year because you still have inflation,

but over the summer they've gone up about a ruble. In the south, when I traveled to the south in July, there were about three rubles more expensive than in Moscow per liter. But overall, there was no massive spikes. Yeah, there's a Russian saying, if you've lost contact with your extended family, buy a house on the black seat. everybody goes to black sea they will definitely

find you know all your relatives and all your friends because and that's something that's been happening for the last 150 years ever since Russia got established on black sea people have started a lot of these stuff

there were Turkish slave force and Russia knocked out the Turks out of the area and the city started growing into something quite different obviously they started growing in tourism spots. And it's been that way for the last 150 plus years. So yes, every year gasoline Petro gets a short demand in August when this gigantic wave of people starts heading north, starts heading home, which is why right away, we started vacationing in July. Because it's much

worse saying than August. And you get these gigantic, just gigantic traffic jams that are sometimes tens of kilometers long, and a lot of them. Because, again, it's a smas, and you have all the traffic from the trucks heading up toward Moscow, northern Europe. Because, by the way, August is also the season that they pick all the crops in the south, and they start exporting portions of those crops up into the north, and northeast. A lot of extra traffic from heavy. heavy-duty trucks. So, yes, it's every single year. This year's a little different because there are habits. But again, in Russia, there's enough fuel. Small stations are always going to suffer.

Because, by the way, when it's some private station, they're still buying from the big refineries. And the big refineries are owned by gas prom, rostneft, look oil, gaspram nift. They're owned by these big companies. So they're, of course, going to take the fuel first to their own fueling stations, their own networks of fueling stations.

And then these smaller ones get whatever's left. And there's nothing left. And, you know, oh, well, as they say, you're up shit creek without a paddle. So that's just, and it happens. It happens quite a bit. It's also why their fuel quality tends to be lowered than the big

chains because they get whatever's left. So if they're trying to refuel in some little station, mom and pop station, some village, yeah, chances are this time of year, they may be out of fuel, quite literally may be out of fuel. The dealers will be delayed because everything is going to the big boys, and the big boys are punching through in massive amounts. Yes. And just to repeat, again, a simple point, but one that you are also familiar with, obviously, the military works on diesel, commercial vehicles work on diesel, industry manufacturing works on diesel when it uses fuel, they do not work on gasoline. I mean, that I think is, again, a simple point to make, but it's an

obvious one. So this is not going to affect the big Russian manufacturing economy, just to say. Now, can I touch now quickly on the overall situation in the economy, because Alex and I have done some programs about this. We've explained the anti-inflation policies of the central bank. There was a big meeting in Moscow. Putin chaired it. All of the top people were there. The finance minister, the central bank chair, the economics minister, all of them. We're going to get growth in Russia this year.

and inflation is coming down faster than expected. So we're going to see more interest rates cuts in September. Is that also your sense? Yes, I'll begin with my personal position. I'm against central banks. I've studied economics. I've studied economics in university and afterwards. And I personally don't see...

To me, a central bank is like taking an alcoholic and making him ahead of your alcohol marks. And please, may I, be careful with it. Putting bankers in charge of the banking system is not a good idea. It never has been. And that's my personal view. Anything a central bank does used to be done by the Ministry of Finance, and the Minister of Finance is under some kind of government control.

As opposed to central bankers, it just, depending on the central bank, what they do, they went too far. because last year we had a 4.5% growth. Putin's orders was to keep the growth at 3% or higher, but not to overeat the economy, but a 3% is about a right level. Right now, in August, we have a 1% growth, 1.1. They cut too hard.

At the beginning of the year, we had a 0.8% growth. They started relaxing it some in September out of fear of what they just did. And right now we're expecting about a, well, the commentary is very, but in September is the next big meeting. And in the U.S. two in a lot of countries, I don't know why exactly September, everybody decides to, I guess, post-holiday. But it's looking at about a six, five to six, some are saying up to eight percent cut on interest.

Because what happened was when the interest hit, to squeeze. inflation out, they up to end all business, that's impossible to take a loan. Because, I mean, you have to make a 24% profit just to pay the loan, the interest in a loan out. And then you have to make profit to have a reason to be in business. And that's just, that's just too much. So it really put a very big damper on small and medium business. A big business don't have to worry about it.

Mostly they fund themselves. Any business associated with the military has grants. agriculture sector gets grants, but everybody else, they have to get loans. And the central bank just went way too far. So now it's like they're going to be massively stepping back and big hits

because they need to get the economy back up. So that's the issue right now. Just how much are they going to cut? That they're going to cut is beyond the doubt. How much are they going to cut is being, I've seen from 1% to 8%. And I'm thinking most people are thinking about 5% or 6% all, most of the analytics on the banking side. So we'll see.

We'll see pretty soon as a matter of fact. I mean, that is going to be a 5% to 6% cut is a big cut, just to say. But I mean, clearly we are looking at growth in the economy this year. And in June and July, where I thought there might be a contraction for the reason that you said that monetary policy was too. tight. It turns out that Russia avoided contraction. The economy, the economy clearly has enormous momentum behind it, a fact which people perhaps don't quite understand in the West. It has enormous ability to absorb interest rate shocks far greater than Western economies do. And this isn't something that people in the West ever quite get their heads around.

Anyway, that's my last question. That was my last question. I just wanted your comment on that. And you know, there's a lot to be said for sanctions. And why Russia is not only isn't bothered by sanctions, but most Russian businesses are asking for more sanctions. 19th packet. Don't stop to the 50th packet. Come on, more sanctions. Because what happened with these sanctions is, one, the money that was flowing out of Russia

by it's been cut off. The money's been cut off. The money's staying in Russia, and the money's getting reinvested into the Russian economy. A lot more than it was before. Two, a lot of the Western companies have left. I know Exxon, for example, wants to come back. I don't know what Exxon's going to do, realistically speaking. The main technology Exxon had at the table back in 2014 was marine drilling.

That's what they were brought in by Rosneft as a partner. They were going to get one-tenth of all the revenues because they brought in marine drilling equipment and technologies. Obama chased them out of there in 2014. After they hit their one wildcat well hit sweet light crude north of the territory about the size of Moscow, 60 kilometers across. And there's multiple same type of geological locations. There's an estimated $1 trillion worth of light, sweet crude,

just north of our hangos. Well, when they left, when Obama said, that's it. Yeah, that's a hundred billion dollars that they've lost, basically. And you figure about $30 billion of that would have gone to the U.S. government taxes over a 10-year period. Whoops. Well, they left, yes, that well is no longer being, I mean, they got the, well, they got, they know it's there. And Rosnev started investing money in developing their own offshore technologies. And it's not even that deep marine.

They start developing their own technology. So I don't even know where companies like X-Ron will fit back in. You've got companies like the German companies producing gas turbine engines. You know, Russia also produces gas turbine engines. And the big difference between Russia and German gas turbine engines, the German turbine engines are more efficient. They are that. They're quieter. They're more efficient.

and they break constantly because the main money flow that comes from those turbine engines is repairing them. Maintenance, constant maintenance. The Russian turbine engines are gas, because the turbine engine siphons a certain amount of gas off the pipe, and then runs heats the gas, heats the gas, and that gas flows faster and pushes the gas further down the pipeline. Well, the Russian engines are cruiter, they're louder, they're less efficient, and they can run for years upon years with barely any maintenance. And there's a savings there. And the whole thing about, oh, it's German, it's German, we have to buy German.

I've seen that many times. But when you start really looking at it, you're not saving anything, especially when any political issues come. up like they've come up. And all of a sudden, those engines have to be shipped to Canada. Those getting done. But if you had a Russian turbine engine, not only would it probably now break, if it needs to be fixed, it goes to Kazania at worst to get fixed and they are tooled. Starting in 2013, 2014, and much faster in the last three years.

So it's not going to be business as usual. One, two, a lot of those niches have been closed. So I don't know where these companies are planning to come back to or what they're planning to do because their niches are closed. And they've been closed by Russians. They've been closed by Chinese. They've been closed by Indians and other companies. As a fact, something I mentioned on my podcast I'm going to put out today. You know, Trump has gotten another great economic boost for the area.

and stopped another conflict. He stopped the conflict between India and China. There's talk now of taking the Russian pipeline that goes into China, and they're going to extend it out to India, it's or Bangladesh. So, again, this is going to be a mapline. It's going to go into, toward Thailand and Cambodia, and so on. So, yes, there's going to be growth. There's major projects on the horizon.

And I'm sure the Americans are going to be wanting to buy gas. two to Souther to Europeans. Stanislav Kapubnik, thank you very much again for this extremely interesting program. Again, for somebody who's actually on the seat and who knows the industry and the country well. Thank you. Thank you, Stanislav. Where can people follow your work once again? Thank you.

Instagram. I love the Instagram. X. Stasker Pivnik. That's Slavic with a K. Mr. Slavic Man. That's Slavic with a K. On Telegram, Stasadarabratna is the Russian channel,

and Stas was there is the English Channel. All right, I will have everything as a link in the description box down below. Take care, everybody.