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Wave of Bankruptcies Hits Russian Oil as Half of Sector Operates at a Loss
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Russia is seeing a wave of bankruptcies among smaller oil producers as crude oil prices plunge to 40$ per barrel or lower, and tighter US sanctions squeeze revenues across the sector, The Moscow Times reported on February 17, citing Russian state media.
State-owned VTB bank is preparing to file for bankruptcy against First Oil, a company owned by former Sibur shareholder Yakov Goldovsky, after it accumulated around $78 million in debt that it can no longer service. First Oil operates in Khanty-Mansiysk, Russia’s main oil-producing region, holding several small fields with total reserves of about 14 million tons and an annual output of roughly 500,000 tons.
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According to Russian media sources, cited by The Moscow Times, the company’s financial troubles began during the pandemic but worsened sharply after new US sanctions forced Russian crude to be sold at steep discounts—in some cases up to $30 per barrel—pushing effective export prices toward $40 or below.
Other bankruptcies have followed. In late 2025, the oil company Yangpur, representing Belarusneft’s interests in Russia and developing fields in the Yamalo-Nenets region, entered bankruptcy proceedings.
Earlier, Astrakhan Oil Company and NK Gorny, which held three licenses in the Nenets autonomous district, were declared bankrupt following lawsuits from tax authorities. In January, Moscow Credit Bank demanded nearly $91 million from the owners of one of the bankrupt firms, The Moscow Times wrote.
Analysts say the outlook for Russia’s oil industry is deteriorating as export revenues fall, particularly for projects with high production costs. Rosstat data cited in the report shows that about half of Russia’s oil and gas producers are now operating at a loss, with combined losses reaching $7.4 billion between January and November.
Even profitable companies have seen earnings cut by more than half, down to about $39 billion over the same period.
High interest rates are adding further strain. Russia’s central bank has reported that lenders were forced to restructure $35 billion in oil-and-gas sector loans, making the industry the leading contributor to credit restructurings across the economy, according to The Moscow Times.
“The oil-producing sector is sliding into crisis, and the latest sanctions will accelerate this process,” Craig Kennedy, a former Bank of America vice president now affiliated with Harvard’s Davis Center for Russian and Eurasian Studies, told The Washington Post.
Earlier, Russian corporations have recorded an unprecedented surge in financial losses as of late 2025. Between January and November, 18,200 organizations reported total losses of 7.5 trillion rubles (approximately $78.2 billion).
This figure marks a historic record, surpassing the $73 billion lost in 2024 and nearly doubling the $41.7 billion recorded in 2023. Furthermore, the proportion of unprofitable companies has climbed to 28.8%, representing the highest rate since the pandemic-driven disruptions of 2020.
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