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Russia’s war economy is leading to manpower shortages in the crucial oil industry

Russia’s oil and gas industry has been crucial in financing the invasion of Ukraine, giving the Kremlin the resources to keep fighting even as the conflict drags on into its third year. But the industry faces manpower shortages as the full mobilization of the Russian economy for war worsens the long-standing demographic crisis.

In a country where Gazprom PJSC’s “Dreams Come True” slogan has long encapsulated the career aspirations of many citizens, high-paying energy companies now have to compete for workers against the Russian military and weapons manufacturers, according to analysts and recruiters who work with the industry. The sign-on bonus alone for a soldier fighting in Ukraine can equal nearly a year’s salary for an average oil and gas field worker.

This problem is not entirely new: Russia has been dealing with a shrinking workforce for almost two decades. The collapse in birth rates in the 1990s was a key cause and the Covid pandemic compounded the challenge, but the invasion of Ukraine has made it much more acute.

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