The Russian Oil Services Market May Grow by 7% in 2026
From 2021 to 2025, the oil services market grew at an average rate of 13% per year, with about two-thirds of the growth attributed to inflation rather than an expansion in the scope of work, as noted in the report. By 2028, the growth rate is expected to slow to approximately 8% per year.
Oil and condensate production in Russia is expected to remain at a plateau of 510–520 million tons in the coming years, but maintaining this level is becoming increasingly resource-intensive.
Between 2021 and 2025, drilling increased by 11%, while the workforce in the industry grew by 16%, even though production declined by 2%.
Financial conditions of contractors are putting pressure on the industry. According to the report, 39% of the oil services market's revenue was in a zone of financial risk in 2025, up from 27% in 2021; companies did not increase their debt, but the cost of servicing it rose. For the first time, operators' investments in production exceeded available cash flow by 20%, and 93% of CAPEX is directed toward contractors, compared to 76% in 2021, analysts report. The wear and tear of drilling rig fleets reached 55%, and their numbers have not increased for several years.
"The price of a ton of oil has not risen for the operator — it has risen for the contractor. To maintain production at plateau levels, the market is increasing the scope of work and manpower, and the difference is currently absorbed by service margins," explains Dmitry Kasatkin, Managing Partner at Kasatkin Consulting.
According to Kasatkin Consulting, the market structure by segments remains relatively unchanged over time.
Independent services account for 46%, 49% are provided by players associated with vertically integrated oil companies (VINC), and 5% are accounted for by international entities. The most rapidly growing and profitable segments, according to analysts, are those related to drilling support, cementing, drilling fluids, and mechanized extraction, while the least profitable are those related to geological exploration. Oil service companies did not provide comments.
Andrey Polishchuk, Senior Analyst for the Oil and Gas and Transportation Sectors at Euler, believes that the market will primarily grow due to increased volumes against the backdrop of easing OPEC+ quotas — this, he estimates, should boost drilling and demand for additional services from service companies. Sergey Tereshkin, CEO of Open Oil Market, notes that according to 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, and according to the International Energy Agency (IEA), it dropped from 9.26 million b/d to 8.76 million b/d. The expert explains that companies are increasingly maintaining production levels without drilling new wells. However, Mr. Tereshkin adds that there is potential for growth — actual production in the RF is over 1 million b/d below OPEC+ quotas, but realizing this potential depends on the safety of shipping in the Black Sea. According to S&P Global, in August, supplies of Russian oil through Black Sea ports fell by more than half compared to July, to 380,300 b/d, while total maritime exports decreased by 12% to 3.83 million b/d (see “Ъ” from September 5).
Dmitry Prokofiev, Director of External Communications at NEFT Research, states that the necessity to increase investments in exploration and production, including a shift towards more complex and costly technologies, creates a steady demand for service offerings. However, the continued dominance of the price factor signals limitations on the physical growth of the market. According to the expert, high debt burdens, expensive financing, declining profitability even amid rising revenue (see “Ъ” from May 7), and technological dependence on imports are systemic problems in the industry. Under these conditions, the advantage will go to those who can manage their debts and invest in technologies, believes Mr. Prokofiev.
Source: Kommersant
