Russian fuel export curbs could raise prices in Armenia, expert warns

Russia's temporary ban on gasoline and aviation fuel exports, introduced to protect its domestic market following Ukrainian strikes on oil infrastructure, could lead to higher fuel prices in Armenia and create uncertainty over supplies, according to Armenian energy expert Armen Manvelyan.

Russian President Vladimir Putin announced the export restrictions after convening a meeting on fuel supply issues stemming from attacks on oil refineries and storage facilities. Putin said Russia had supplemented domestic supplies from strategic reserves and that fuel output had declined by only 4% compared with the same period last year. Russian authorities are also considering a complete ban on diesel exports.

Manvelyan said the disruption is part of a broader global trend rather than a problem confined to Russia.

"Mutual strikes on oil refineries are creating an overall gasoline shortage," he told Panorama.am on Monday. "Russia is one of the world's largest exporters of gasoline and diesel fuel, so this will contribute to a global supply deficit and higher prices."

Although global oil prices have recently eased, Manvelyan said fuel shortages could still drive gasoline and diesel prices higher. Replacing Russian supplies with imports from other countries would not shield consumers from rising costs, he added.

Armenia, a member of the Eurasian Economic Union (EAEU), imports most of its fuel from Russia under preferential arrangements. However, Manvelyan said it remains unclear whether Moscow will maintain existing export quotas for EAEU member states.

"I don't know whether those quotas will remain in place or whether Russia will cancel them for EAEU countries in general, or for Armenia in particular," he said. "That possibility exists, especially given the continuing deterioration in Armenian-Russian economic relations."

Manvelyan also expressed skepticism that Azerbaijan could replace Russian gasoline supplies, noting that Baku imports high-octane gasoline from Russia because its domestic refineries do not produce fuel of that quality. While Azerbaijan could export lower-grade gasoline, it lacks sufficient supplies of premium fuel, he said.

He added that Iran, despite being a major oil producer, has also relied on gasoline imports, including from the United Arab Emirates.

Armenia also imports gasoline and diesel from Bulgaria and Romania, and Manvelyan expects shipments from those countries to increase to help offset any supply shortfalls. However, he said fuel imported from Europe would likely be more expensive than Russian supplies, which have benefited from Armenia's EAEU membership.