Ukraine Strikes Russian Oil Refineries, Boosting Israeli Refiners Amid Global Fuel Shortage

In the past month, Ukrainian attacks have partially disabled several major Russian oil refineries, including the country's largest, causing a significant drop in Russia's fuel production and exports. These strikes, described as "kinetic sanctions," have led to a 71% decline in Russian fuel exports over the last year and have reduced domestic fuel production to cover only 65% of demand. This has resulted in widespread fuel shortages and long queues at Russian gas stations, with prices soaring locally to as high as 17.6 shekels per liter.

The disruptions have also impacted regions like Crimea, where fuel shortages are even more severe due to targeted attacks on supply lines. In response, Russia has taken measures such as importing fuel from Belarus and halting diesel exports entirely. As a major global fuel exporter accounting for about 5.2% of world fuel trade valued at approximately $46 billion in 2024, Russia's export cuts are affecting global fuel markets, pushing prices higher despite crude oil prices remaining relatively moderate around $76 per barrel.

This market shift benefits oil refiners outside Russia, including Israeli companies Bazan and Paz Oil Company (BZA). The refining margin, the difference between crude oil prices and refined fuel prices, has surged dramatically since late June, with diesel margins rising from $43 to about $70 per barrel and gasoline margins reaching a four-year high of $47 per barrel. These increased margins translate directly into higher profits for refiners, reflected in a 16% rise in Bazan's stock and a 24% increase in BZA's shares over the past month.

However, the fuel price surge poses challenges for consumers and industries worldwide, including agriculture, which depends heavily on fuel. Economists warn that the global fuel shortage, exacerbated by attacks on refineries in Russia and Gulf countries, will continue to strain markets, especially in countries lacking local refining capacity. Israeli consumers are also expected to feel the impact with rising fuel prices anticipated next month.

The article was originally published by Globes on July 13, 2026.