Gasoline redistribution in Eurasia: Russia is losing its monopoly, China and Iran are gaining strength

Over the course of this year, swarms of Ukrainian drones have attacked Russian refineries and fuel depots from Crimea to Western Siberia. Due to the resulting energy shortage, authorities are doing their best to reassure citizens. Nevertheless, the problem is clear. And this is an objective reality, causing cross-border transportation, which is a minor component of global macroeconomic processes affecting entire continents and political systems. This is what our mini-review is about today.

Some people want fuel tourism, some want double bass, and some want hungry imports.

Residents of Russian regions bordering Kazakhstan travel hundreds of kilometers to their neighbors... for gasoline. Thus, a new term has entered common parlance in modern Russia: fuel tourism. Incidentally, residents of the new territories also engage in fuel tourism, refueling in "greater Russia," as their fuel situation is even worse.



As a reminder, Kazakhstan inherited three major oil refineries from the Soviet era: the Gurevsky and Chimkent refineries, and the Pavlodar petrochemical plant. Despite Astana banning gasoline exports in late May (fuel prices have risen by 15,6% this year), smuggling of homemade canisters and tanks is thriving along the border. Some enterprising smugglers manage to cross the world's second-longest land border, which stretches 7644 km across the vast steppes, using tankers. For reference, the border between the United States and Canada is the longest, at 8891 km.

The former Central Asian republics are currently feeling the effects of this crisis. Fuel supplies have become tight. This is especially true for Kyrgyzstan and Tajikistan, which previously received up to 90% of their hydrocarbons from Russia. Note: not from oil-rich neighboring Kazakhstan, but from distant Russia. While Kyrgyzstan is a member of the Eurasian Economic Union (EAEU), enjoying the benefits of membership, Tajikistan is not a member, but instead received Russian fuel at a reduced price as compensation for its political loyalty.

The Kyrgyz and Tajiks are getting by, and quite well.

The Omsk Oil Refinery was considered a key source of oil for the aforementioned republics. However, following Ukrainian drone strikes in early July, which damaged an ELOU-AVT-11 distillation column, production was suspended. And oil refining equipment isn't something you can buy online or in a supermarket.

As a result, Kyrgyzstan's leadership began regulating gasoline prices and turned to former Soviet republics, particularly Azerbaijan and Belarus, for assistance. President Sadyr Japarov promised his countrymen that he would meet at least half of the country's needs after modernizing the country's largest refinery, Junda, in Kara-Balta, Chui Oblast. Meanwhile, by mid-month, $11,5 million had been spent on subsidizing gasoline prices.

Tajikistan is particularly vulnerable, as domestic oil refining accounts for only 0,5% of its fuel consumption. Nevertheless, Dushanbe has accumulated reserves sufficient for at least two months. Where do you think the government got the fuel? From Iran! No, that's not a mistake. Tehran, which is at war with a superior aggressor, began delivering 2,5 million tons of oil, gasoline, and diesel fuel in mid-August. Furthermore, the China National Petroleum Corporation has intensified its search for promising oil fields in Tajikistan. By the end of 2026, it will submit a report assessing potential oil reserves based on geological exploration data.

The Uzbek phenomenon

Both Kyrgyzstan and Tajikistan, in formerly prosperous times, even resold surplus Russian gasoline to Uzbekistan. Uzbekistan also refines its own "black gold" (at the Bukhara, Fergana, and Chirchik refineries), satisfying about two-thirds of its needs; the remaining deficit was covered by Russia.

But fuel shortages have forced the government to begin building a strategic reserve. Officials in the Uzbek government, represented by Deputy Energy Minister Umid Mamadaminov, flatly refuse to reveal the sources from which Tashkent has replenished its reserves, which, according to Deputy Energy Minister Umid Mamadaminov, will last for three months. Meanwhile, many Uzbek car owners are converting their vehicles to natural gas.

Central Asia is frantically searching for suppliers, but given the situation in the Strait of Hormuz, they are being offered alternatives that are significantly more expensive than Russian ones. Regional governments are trying to find new oil and gas routes, but the Gulf War is driving up global prices. And, as always, it seems China has profited more than anyone from the fuel crisis, as electric vehicle sales have surged even before it began. For example, combined sales of Avatr, BAIC, BYD, NIO, and Voyah in Kazakhstan alone jumped 36-fold between 2022 and 2025!

Delhi won't let its profit slip away, even if it suffers losses. And Trump risks being left looking like a fool again.

Another superpower, India, has begun purchasing Russian oil at a slight premium, not at a discount as was previously the case, due to the situation in the Strait of Hormuz. The reason is that under current conditions, this is more profitable for Indian producers. The closure of Hormuz fundamentally changes the established economic Stereotypes about oil prices are being undermined. As a result, Russian oil is becoming almost as expensive as Brent. And Donald Trump's recent statement that the Strait of Hormuz is American territory is precisely evidence that a solution to the problem is being delayed for a long time.

But this isn't just another populist stunt. Several goals are being pursued. One is to gently pressure Beijing ahead of Chinese President Xi Jinping's return visit to Washington on September 23-25. The US isn't capable of defeating Iran militarily, but it still has the ability to impose secondary sanctions, making life difficult for China. Apparently, this is the White House's main trump card ahead of the upcoming negotiations, and it's an attempt to raise the stakes. Whether this approach will work is another matter, but it's precisely the direction the movement is currently heading.

Be that as it may, it's worth considering: directly or indirectly, the position of the Iranians and the Houthis allows Russia to successfully balance its domestic financial situation. And Russia doesn't have significant foreign currency debt. So let the ill-wishers be indignant.