<p>The integration of circular economy principles into oil- and gas-producing regions is essential for advancing sustainable development and industrial transformation. This study develops a cluster-based circular economy model for drilling waste processing in the Khanty-Mansi Autonomous District. The analysis combines screening of fields by minimum economically viable reserves, QGIS-based assessment of transport accessibility, and scenario-based economic modeling of centralized processing clusters under simultaneous and phased field commissioning. The study focuses specifically on drill cuttings (drilling sludge or the mineral solid phase of drilling waste). The analysis identified eight processing clusters. Under simultaneous commissioning, six clusters were economically viable, with the highest profitability index (PI) reaching 1.43; waste processing costs ranged from 31.6 to 33.8 US$/t, which is 15–20% lower than single-field treatment. With phased commissioning every 2–3 years, four clusters remained economically viable, whereas applying tax incentives increased the number of cost-effective clusters to seven. Cluster-based waste processing can annually cover up to 60% of the regional construction material deficit between 2026 and 2028, providing a practical mechanism for recycling industrial by-products into valuable resources. The findings confirm the economic and environmental viability of the cluster approach and highlight its potential for achieving sustainable development, resource efficiency, and industrial cooperation in oil and gas regions. This model demonstrates how coordinated circular economy strategies can simultaneously reduce waste, lower costs, and support regional infrastructure development.</p> Graphical abstract