The Russian Oil Services Market Expected to Grow by 7% in 2026
Between 2021 and 2025, the oil services market grew by an average of 13% per year, with around two-thirds of this growth attributed to inflation rather than an increase in the volume of work, the report notes. By 2028, the growth rate is expected to slow to approximately 8% per year.
Oil and condensate production in Russia is expected to plateau at 510–520 million tons in the coming years, but maintaining this level is becoming increasingly resource-intensive.
From 2021 to 2025, drilling activity increased by 11%, while the number of people employed in the sector grew by 16%, even as production fell by 2%.
The financial condition of contractors is putting pressure on the industry. According to the review, in 2025, 39% of the oil services market revenue was in the zone of financial risk, compared to 27% in 2021—companies did not increase their debt, but the cost of servicing that debt has risen. Investment by operators in production for the first time exceeded available cash flow by 20%, with 93% of CAPEX going to contractors compared to 76% in 2021, analysts indicate. The depreciation rate of the drilling rig fleet has reached 55%, and their number has not increased for several years.
“The price of a ton of oil has not increased for the operator—it has increased for the contractor. To maintain production at a plateau, the market is increasing the volume of work and manpower, while the difference is currently being absorbed by service margins,” explains Dmitry Kasatkin, managing partner at Kasatkin Consulting.
According to Kasatkin Consulting, the market structure by sectors is not changing significantly over time.
Independent service companies account for 46%, while 49% come from players that are part of or affiliated with vertically integrated oil companies (VINK), and 5% is attributed to international organizations. Analysts identify drilling support, cementing, drilling fluids, and mechanized extraction as the most rapidly growing and profitable services, while those related to geological exploration are considered the least profitable. No comments were provided by oil service companies.
Senior analyst for the oil and gas and transport sectors at Euler, Andrey Polishchuk, believes the market will primarily grow due to volumes against a backdrop of easing OPEC+ quotas—this, he estimates, should increase drilling and demand for various services from service companies. Sergey Tereshkin, CEO of Open Oil Market, notes that, according to data from the U.S. Energy Information Administration (EIA), oil production in Russia decreased from 9.2 million barrels per day (b/d) in January to 8.85 million b/d in July, while the International Energy Agency (IEA) reported a drop from 9.26 million b/d to 8.76 million b/d. Companies, the expert explains, are increasingly maintaining production levels without drilling new wells. However, Mr. Tereshkin adds, there is potential for growth—actual production in Russia is more than 1 million b/d below the OPEC+ quota, but realizing this potential depends on how safe navigation is in the Black Sea. As reported by S&P Global, in August, oil deliveries from Russia through Black Sea ports dropped by more than half since July, to 380,300 b/d, while total maritime exports fell by 12%, to 3.83 million b/d (see “Kommersant” of September 5).
Dmitry Prokofyev, Director of External Communications at NEFT Research, states that the need to increase investments in exploration and production, including a shift towards more complex and expensive technologies, is creating a steady demand for service offerings. However, the fact that the pricing factor remains dominant indicates limitations to the physical growth of the market. According to the expert, high debt burdens, expensive financing, and reduced profitability even amid revenue growth (see “Kommersant” of May 7), as well as technological dependence on imports, are systemic issues facing the industry. In this context, those who can manage debts and invest in technology will have an advantage, Mr. Prokofyev believes.
Source: Kommersant
