Amidst a backdrop of sustained downward spiral in the price of oil over the last 12 months, preliminary figures emerging from Russia reveal the country’s economy contracted more than 3.5% last year.

The economy shrank 3.7% in 2015, its worst performance since 2009.

Much of this is attributed to three key factors; the ongoing plunge in the price of oil, a similar weakness in the strength of the Rouble, and the effect of recent Western sanctions.

The drop in oil prices – itself arguably one of the stories of 2015 – has perhaps had the largest influence in the economy’s decline. Fittingly, news of Russia’s economic slump came on the same day that oil prices again fell to around $30 per barrel, having briefly rallied at the tail-end of last week.

It is suggested by some sources that up to half of the government’s revenue is generated by taxes from oil and gas. Further, it is argued that the sustained scenario of low oil prices is one the country has failed to prepare for in the last decade or more.

Indeed, a country report from gasworld Business Intelligence in 2014 noted a need for Russia to diversify its economy beyond the production of raw materials in the medium to long-term, highlighting an increased focus on the manufacturing, high-tech and specialised engineering industries as a way forward.

Such augmentation would likely continue the trend for growth in the country’s gases business, a market that has enjoyed a marked proliferation since 2005. Russia’s commercial industrial gas market has leapt from a value of $350m in 2003 to more than $970m in 2013. Despite this more than 10% average annual growth rate for the period, and the arrival of a number of the industry’s Tier One companies, gasworld Business Intelligence believes there is still much potential to be uncovered in Russia.

Average GDP growth of 4.2% per annum from 2003-2013 slowed in 2014, but was positive nonetheless as it increased 0.6% in 2014 – a level of economic growth that has been sufficient to leverage significant sales of gas, aided by the rate at which the industry itself has progressed. If last year’s economic contraction can be overcome and, potentially, there is some recovery in global oil prices, then any concerns may prove short-lived.

In addition, a much bigger number of end-users today are understood to be willing to adopt onsite supply solutions than used to be the case just 10 years ago; with independent producers and distributors still accounting for more than 60% of the marketplace as of 2013, there is thought to be plenty of scope for potential as the market matures and the onsite business makes strong inroads in the future.

This trend, as well as a general movement toward more modernised infrastructure, is exemplified in a stream of industrial gas projects expected to be realised by some of the industry’s major players in 2015/16, including The Linde Group, Air Products and Praxair.