Russia’s Oil and Gas Industry Starting to see the Impact of Sanctions

The western sanctions on Russia have started affecting Russia’s Oil and Gas industry and its economy. While the European Union was considering a ban, the United States and Canada banned a small amount of Russian oil they imported. But in most cases, Western sanctions have so far avoided directly limiting most of Russia's energy exports.

However, US and EU regulations have already blocked Russia from accessing the funds and advanced technology to develop and maintain the ageing sector.

The decline of the energy industry could slow down one of Moscow's most powerful geopolitical weapons. It has long been used to put pressure on customers and put pressure on foreign governments. It is also another blow to Russia's struggling economy. The oil and gas sector accounts for approximately 40% of its budgetary revenues. About 1.5 million people working in the industry could lose their jobs by next year, analysts say.

According to the International Energy Agency, the oil output along with crude and condensates is also expected to fall 15% this year, taking it to its lowest level since 2003. Rystad Energy consultants say that the production may never return to its prewar peak if the sanctions last for several years.