A large number of tycoons with Kremlin connections wanted a piece of the action, and the Yeltsin government acted to accommodate them ("Look, See," 1998).

Subsequently, however, consolidation has been permitted, with the largest participants acquiring up to about a third of the industry, a large enough share to allow substantial efficiencies of scale ("Look, See," 1998). More recently, President Putin made clear that there would be no "review," of privatization, a measure that has increased confidence and encouraged further investment in the industry (Whalen, Herrick, and Bahree, 2001).

Even prior to the Putin decision to confirm privatization, the Russian industry had stabilized, and begun to show signs of recovery. The post-Soviet drop in production stabilized in around 1995, and production was roughly constant for the next few years. By the end of the 1990s, however, new investments were coming into the industry, and production began to trend upward. By 2001, Russian oil production had increased by about 15 percent over two years, and accounted for some 10 percent of world oil production ("Russian Oil Power," 2001). This progress has been due primarily to the application of improved technology, allowing further recovery from wells and fields that by Soviet-era technological standards had been regarded as depleted.

By 2001, the revitalization of the Russian oil industry was beginning to impinge significantly on world oil markets. The leadership of OPEC underestimated the rate of Russian oil-industry recovery, and thus found itself at risk of being caught short by non-member Russia's actions in its own efforts to control world oil supplies (Whalen, Herrick, and Bahree, 2001). Accentuating the problem, from OPEC's point of view, is that several other major oil exporters, such as Mexico, made it clear that they would not reduce their own oil exports by a