Oil Bankruptcies, Debt Crisis, and Hidden Nationalization: How russia’s Economy Is Collapsing from Within

russian state bank VTB is initiating bankruptcy proceedings against the “First Oil” oil group, whose debt to the bank amounts to $78.3 million. The group produces up to 500,000 tons of oil per year in the komi and khanty-mansi autonomous district and has proven reserves of about 14 million tons. Now all these assets will come under the control of state structures.

The reasons for the collapse are systemic. Sanctions pressure has caused russian oil prices to fall below $40 per barrel, making some fields unprofitable. The central bank’s high key rate made it impossible to refinance debts. The cumulative result of extraction companies in 2025 was minus $7.5 billion, while the volume of restructured industry loans reached $35.2 billion: in fact, every fifth industry loan was rewritten on new terms.

“First Oil” is not an exception, but part of a wave. At the end of 2025, “yangpur” – a structure of “belarusneft” in the yamalo-nenets district, went bankrupt. Earlier, the astrakhan oil company and NC “gorny” fell victim to tax claims. Half of all oil and gas companies in russia are now unprofitable: from January to November, the cumulative loss amounted to 575 billion rubles. Those that remain profitable have halved their profits – to 3 trillion rubles.

The debt market is collapsing separately. In January 2026 alone, russian companies failed to meet their debt obligations 51 times – twice as many as a year ago. The amount of missed payments was 3.38 billion rubles, compared to 1.78 billion in January 2025. In just one week, 10 companies defaulted. For the whole of 2025, there were 25 bond defaults, a record since 2022.

According to the central bank, 11% of all corporate loans are already problematic. Taking into account restructured loans, this is almost 15% of the entire corporate portfolio. Restructuring affected 2.7 trillion rubles in loans to oil and gas companies, the same amount – in industry, and 1.6 trillion – in metallurgy and mining. Coal companies have accumulated more than 300 billion rubles in net losses.

The default rate in 2026 already significantly exceeds that of 2025, and loan quality will continue to deteriorate. aleksandr shokhin, the head of the RSPP – russia’s largest business association, whose board includes billionaires from the Forbes list, has openly admitted that russian businesses do not believe that the tax pressure is temporary and expect fiscal conditions to continue to deteriorate over the next five years.