Small oil producers in Russia's regions start to go bankrupt as prices collapse

Tighter US sanctions, which have pushed Russian oil prices down to US$40 a barrel and below, have led to a wave of bankruptcies among small companies in Russia's main oil producing regions.

Source: The Moscow Times, an independent Amsterdam-based news outlet, citing Russian media outlet Kommersant

Details: The state-owned VTB Bank plans to petition for the insolvency of First Oil, an oil group formerly owned by Yakov Goldovsky, a shareholder in Sibur, Russia's largest petrochemical company.

Goldovsky's company, which operates in the Khanty-Mansi Autonomous Okrug – a key Russian oil-producing region – has accumulated around RUB 6 billion (about US$78.2 million) in debt it cannot repay. The company owns several small oilfields with combined reserves of 14 million tonnes and has an annual output of 500,000 tonnes.

First Oil's situation worsened during the Covid-19 pandemic. The latest US sanctions, which have forced Russian producers to sell crude at discounts by as much as US$30 a barrel, dealt the final blow to Goldovsky's business. Debt to creditors rose, making it difficult to service loans.

The Yangpur oil company, which represents Belarusneft in Russia and has been developing two fields in the Yamalo-Nenets Autonomous Okrug, entered insolvency proceedings at the end of 2025.

Earlier, the Astrakhan oil company and the Gorny oil company, which held three licences in the southern Nenets Autonomous Okrug, also went bankrupt due to claims brought by the tax authorities. In January, Moscow Credit Bank demanded around RUB 7 billion (about US$91.2 million) from the owners of the bankrupt firms.

Freedom Finance Global analyst Vladimir Chernov noted that the condition of Russian oil companies is deteriorating, with export revenues falling, especially for high-cost projects.

According to the Russian Federal State Statistics Service, half of Russia's oil and gas producers are now operating at a loss. Between January and November 2025, the sector collectively lost RUB 575 billion (about US$7.49 billion). Companies that are still making a profit saw their earnings drop by more than half, to RUB 3 trillion (about US$39.1 billion), over the same period.

Background: Russian oil producers may have to cut output sharply in the coming months, as increased pressure from US President Donald Trump and European countries is restricting exports, while storage facilities are struggling to cope, which will put further strain on the Kremlin's military budget.

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