The Changing Role of Banks in Russian Oil Sector

The structure of ownership and control of the Russian oil industry - one of the key areas of the country's economy - has changed radically over the past few years. Industrial and financial capital have merged. Companies and individuals in the oil sector have become involved in the foundation of new banks. The banks themselves are exerting greater ownership rights over the oil industry as the role of the state has diminished, although the cooperative relationship in these "ownership circles" is beginning to break down and become more competitive. What are the likely results of this more interventionist approach by the banks? The Russian oil sector still faces major problems in financing its enormous investment needs. Is a new era beginning, with increasing options for foreign investors? This paper assesses the evolution of these crucial changes and offers insights for businesses and policy analysts alike.