Russia’s War Economy Starves Crucial Oil Industry of Manpower

-- Russia’s oil and gas industry has been crucial for bankrolling the invasion of Ukraine, giving the Kremlin the funds to keep fighting even as the conflict drags on through its third year. But the industry is facing a shortage of manpower as the full mobilization of Russia’s economy for war exacerbates a longstanding demographic crunch.

Russia’s oil and gas sector lacks some 40,000 employees this year, according to estimates from Moscow-based Kasatkin Consulting, which employs some former Deloitte researchers in the region. The industry raised the number of online job listings in the first quarter by 24% compared to a year before, looking not just for qualified personnel but also low-skilled workers, show data from major Russian recruitment platform hh.ru.

Last year, Russia’s state defense corporation, Rostec, raised salaries by an average 17.2%. “We still need people,” Chief Executive Officer Sergey Chemezov told Vladimir Putin in August. “Many of our facilities have been working on the weekends, on bank holidays, and at night.”Putin’s decision to mobilize Russia’s economy for war has worsened a longstanding demographic problem.

That level of immigration is just a drop in the ocean compared with Russia’s demand for labor. At the end of March, the nation needed 1.86 million extra workers, according to data from Federal Statistics Service based on companies’ requests to job centers.“The northern regions are starving for more workforce, there are just not enough people,“ said Denis, a 41 year-old who left the Russian energy industry last August to pursue another career in Moscow.

All those perks are still not enough to lure the most desirable young skilled workers to the energy industry. In 2022, 816,000 students graduated universities in the field of energy, down by almost 13% compared with 2018, according to Sofia Mangileva, an analyst at Moscow-based consultant Yakov & Partners.

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Russia’s War Mobilization Starves Its Crucial Oil and Gas Industry of WorkersRussia’s oil and gas industry has been crucial for bankrolling the invasion of Ukraine, giving the Kremlin the funds to keep fighting even as the conflict drags on through its third year. But the industry is facing a shortage of manpower as the full mobilization of Russia’s economy for war exacerbates a longstanding demographic crunch.
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