Regime Energy Minister Signs Deals in Russia Amid Fuel Crisis

Struggling with a crippling fuel shortage, Myanmar’s pseudo-civilian government has turned to Russia for discounted oil and gas, signing new energy deals in Moscow as the regime leans ever more heavily on its allies to keep the country running.

Electricity and Energy Minister Ko Ko Lwin spent last week in China and Russia, exploring opportunities for long-term cooperation in the electricity and energy sectors and seeking investments.

In Moscow, he met Russian companies to discuss securing crude oil, petroleum products, LNG, LPG and fertilizer at preferential rates based on the countries’ “bilateral friendship” under a long‑term supply

He also held talks with Inter RAO on plans to build a coal‑fired power plant, an oil refinery and LNG facilities at Dawei deep-sea port. Later that day, Ko Ko Lwin signed a cooperation agreement with Russia’s investment development fund, RC Investments, covering energy projects and long‑term crude supplies.

Alexander Shatirov, director of RC Investments, said the memorandum reflects “mutual interest” and lays the groundwork for Myanmar to become a strategic hub for Russian petroleum exports to Southeast Asia, leveraging its geographic position. He added that the partnership “has great prospects.” According to the agreement, the two countries will form working groups comprising energy ministry officials to exchange information on projects and technical cooperation.

During his visit, Ko Ko Lwin also met with his Russian counterpart Sergei Tsivilev and presidential adviser Anton Kobyakov. He discussed securing concessional loans from Moscow to speed up projects—a move observers say underscores the junta’s growing dependence on Moscow for financial and technical support as the ongoing fuel crisis cripples the country’s economy.

Talks between Moscow and Naypyitaw on refineries and fuel imports have dragged on for years with little to show. In 2022, the regime even set up a committee to import Russian fuel. Analysts say it remains unclear whether the latest agreements will deliver concrete results.

During a visit to Russia last June, then junta Transport Minister Mya Tun Oo also promoted Myanmar as a gateway for Moscow’s trade ambitions in Southeast Asia. He emphasized that goods from Russia could be shipped through Yangon’s ports and further distributed by road and rail to other Southeast Asian destinations. He also extended an invitation to Russian investors, encouraging them to participate in Myanmar’s port and railway development projects, as well as large-scale infrastructure initiatives.

Myanmar imports about 97 percent of its fuel needs. According to the regime’s Energy Ministry, in a typical year the country spends more than US$5 billion to import 5 million tonnes of fuel. Since late February, however, the regime has moved to cut fuel consumption by introducing strict rationing, amid supply chain disruptions linked to the Middle East crisis. Shortages and soaring prices have hit households and businesses hard in major cities like Yangon, Mandalay and Naypyitaw, driving up transport, food and farming costs.

The World Food Programme (WFP) recently warned that the crisis is worsening. Since late February, the average cost of basic staples—mainly rice, palm oil and salt—has risen by 19 percent nationwide, driven by the Middle East crisis. Farmers have been forced to cut back on fertilizer use as prices climb and supplies dwindle. A 50 percent reduction in fertilizer for rice could slash yields by 10-15 percent, putting further pressure on rice prices and deepening food insecurity, said the UN organization.

Even before the US and Israel went to war with Iran, Myanmar was already facing a fuel crisis. In recent years the cash-strapped regime has imposed limits on fuel imports to conserve foreign currency, while repeatedly inviting Middle Eastern countries to invest in Myanmar’s oil and gas production.

Before traveling to Russia, Ko Ko Lwin visited China to discuss discounted long‑term fuel imports. Junta statements said he also proposed a tripartite committee to accelerate cooperation.

Despite political backing from Moscow and Beijing, Myanmar’s instability and ongoing civil war have deterred large‑scale investment, leaving the regime reliant on promises of future projects to ease its fuel crunch.