International political risk analyst Maximilian Hess published an article in the online newspaper Brussels Morning, examining the connection between the energy crisis in Mongolia and domestic business conditions. He emphasizes that the real impact of the global energy crisis is felt not only on international shipping routes but also at gas stations in Ulaanbaatar. Hess states: “To see how the global energy crisis affects life, one should pay attention to the gas stations in the capital of Mongolia.” A translation of this article is available on the MongolianNews website.

Last year, on August 3, the government of Mongolia imposed restrictions on fuel sales: drivers could refuel every other day depending on the last digit of their vehicle's license plate, and the amount purchased was limited to one-third of the tank. For two weeks, the U.S. embassy monitored the fuel shortage in the country and recommended avoiding unnecessary trips. These measures became a serious test for a state that has sought to position itself as an attractive tourist destination over the past decade.

The restrictions were lifted on August 18 after Russia agreed to an emergency supply of 25,000 tons of gasoline and 5,000 tons of aviation fuel. However, this is only a temporary solution, considering that ongoing attacks on Russian oil refineries threaten the stability of supplies in the future. The Angarsk refinery, which historically provided nearly all fuel for Mongolia, has not yet been affected, but the situation could worsen. Additionally, Russia's assistance may not be free, and it remains unclear under what conditions it will be provided.

Mongolia's dependence on fuel imports raises serious concerns. Last year, the import of gasoline and diesel accounted for one-third of the country's total imports, and consumption is growing at 14% per year. The Mongolian economy, largely dependent on the mining sector, heavily relies on diesel fuel, which is used to operate heavy machinery and generators at mines. Fuel supply issues directly impact exports and, consequently, the economic situation in the country.

Mongolia does not have its own oil refineries, and a new plant financed by India is not expected to start operations until 2028. Until then, about 97% of fuel will come from Russia, making the country vulnerable to external factors. In response to the crisis, the government is seeking alternative supply sources, including cooperation with South Korea and Kazakhstan. However, these solutions are not cheap and may create new dependencies.

Mongolia's problems extend beyond the economy and touch on geopolitics. As a small democratic country, it faces challenges related to dependence on two major neighbors. The U.S. expresses support for Mongolia and is increasingly activating cooperation in the fields of mining and infrastructure development each year. However, issues arising from dependence on China and political risks continue to be relevant.

Published Date:2026-09-27