The present study examines the transformation of Russian energy policy ad its performance after market transition. On the basis of historical policy review, it reveals that environmental conservation in energy industry has been repeatedly specified in Russian energy policy after the 1990s whilst its focus has still descended to quantitative expansion of hydrocarbons. In this context, this paper explains this situation from the perspective of coordination mechanism such as market and government. Despite a series of liberal policies during market transition, it becomes clear that Russian energy market has not been completely liberalised in terms of price and privatisation and retained control of the government, whilst the process of energy policy formation and implementation has been highly politicised, especially since the 2000s. This paper also derives some characteristics of Russia in those circumstances, such as an existence of strong state monopoly, recognition of energy as public goods, and environmental incompatibility with the existing growth model, which are raised as propositions given to Russian energy policy and challenges to be overcome for its future sustainable growth.