This chapter analyses the development of the Russian oil sector with a particular view to dynamics between resource base, institutions and regulations, and the industry structure as it has evolved since the late soviet period. The path dependence in the development of the Russian oil sector is evident and constrains further reforms. This concerns the technological structure and fixed assets formed under central planning that still limit the applicability of market mechanisms. Also today’s industry structure has its roots in the organizations of the Soviet oil industry. The ownership pattern and modes of operation of the oil companies were, however, to a large extent formed in the second half of the 1990s, a period characterized by a very weak state and absence of a resource management policy. The present structure and policies do not match developments in the resource base, something that will constitute an increasing problem in the years ahead.