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Russian petroleum industry plays a vital part in both the country's economy and international hydrocarbon market, providing a third of state budget revenues and over 13% of global liquid hydrocarbon exports. Yet, nowadays the industry is facing a number of serious challenges, which threaten to undermine its sustainability. These challenges include depletion of the conventional oil resources, technological and economic sanctions and stagnating demand for liquid fuels, especially apparent in Russian traditional export destinations -Europe. The authors attempted to evaluate the impact of these issues and compile a forecast of Russian oil industry using state-of-the-art modelling tools. The calculations show, that even under fairly negative scenario assumptions, Russia is capable of maintaining crude oil and refined products exports above 250 mtoe up to 2040, remaining the world's second liquid hydrocarbon supplier. This, however, is still a huge drop from 425 mtoe of exports in 2018. To ensure sustainability the government and oil companies need to work in conjunction in several fields: facilitate geologic survey of conventional and promising oil and gas basins; domestic development of new oil extraction technologies for accessing unconventional and low-margin oil resources; provide transport infrastructure for remote fields; reforming tax system to better suit the new environment. This way, crude production can be maintained above 500 mtoe in the forecast period and exports even surpass 2018 levels. In any case, however, the need for massive investments and tax incentives coupled with global movement away from fossil fuels means, that in the future oil will be becoming less and less profitable for the state budget, thus Russian government needs to redouble efforts on economic diversification and energy transition.