Bankruptcies Of Oil Companies Have Started In Russia

The foundation of the commodity economy is crumbling.

The intensification of U.S. sanctions, which have brought Russian oil prices down to $40 a barrel and below, has spawned a series of bankruptcies of small oil companies in Russia's key producing regions.

According to "Kommersant", state bank VTB plans to file for bankruptcy of the First Oil Group of former SIBUR shareholder Yakov Goldovsky. Goldovsky's company, operating in the Khanty-Mansiysk Autonomous Okrug, Russia's main oil-bearing province, has accumulated about 6 billion rubles of debt, which it cannot pay off.

It has several small fields with total reserves of 14 million tons, and production is 500,000 tons per year. First Oil's situation worsened back in the days of the pandemic, a Kommersant source told Kommersant. And new U.S. sanctions, which forced oil companies to sell raw materials at discounts of up to $30 per barrel, have finished Goldovsky's business. The debt to creditors has increased and, according to the "Kommersant" interlocutor, there were difficulties with its servicing.

At the end of 2025, the bankruptcy procedure was put under the bankruptcy of NK Yangpur, which represents the interests of Belarusneft in Russia and develops two sites in the Yamalo-Nenets Autonomous District. A little earlier, Astrakhan Oil Company and NK Gorny, which owned 3 licenses in the south of the Nenets Autonomous District, went bankrupt under the claims of the tax service. In January, Moscow Credit Bank demanded about 7 billion rubles from the bankrupt owners.

The situation of Russian oil companies is worsening: export revenues are decreasing, especially for projects with high production costs, states Freedom Finance analyst Vladimir Chernov. According to Rosstat data, half of the oil and gas producing companies in the country are now unprofitable: in January-November they made a total loss of 575 billion rubles. Those companies that remain in profit have more than halved its size - to 3 trillion rubles in 11 months.

The fall in export revenues and the high key rate are turning into an "explosive cocktail" for oil producers. According to the Central Bank, banks were forced to restructure Br2.7 trillion of loans for the industry. The oil and gas sector has become a leader in the economy in terms of the volume and share of restructurings - almost 20%.

"The oil-producing industry is sliding into crisis, and the latest sanctions will accelerate that process," says Craig Kennedy, a former vice president at Bank of America and now an expert at the Davis Center for Russia and Eurasia Studies at Harvard. At a barrel price of about $40, half of Russia's fields are unprofitable, and only those with tax incentives remain on the plus side, industry sources told Reuters. According to their estimates, loss-making oil projects lose about $5 per barrel.

Discounts on Russian oil are increasing, but whatever the price, finding buyers is not an easy task: with the exception of China and partly India, few are willing to risk trading in under-sanctioned barrels, Kennedy notes.

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