Boasting a quarter of the planet’s gas reserves and more than 5 per cent of its crude oil, Russia’s economy has long been dominated by the energy sector. As the country’s isolation intensifies following the invasion of Ukraine, the question now is what next for its most important industry?
Key foreign partners BP, Shell and ExxonMobil have made exit plans, international oilfield service companies have promised no more investment and scores of buyers have started to shun Russian crude.
Gas has continued to flow to Europe and oil production, though down, has not collapsed. But even if Russia’s own energy companies are able to sustain operations, a shrinking market for exports, reduced access to international expertise and the need to redirect billions of dollars of infrastructure investment toward Asia threaten to usher in a period of long-term decline.