Russian oil producers’ income dived within the first half of the yr, pushed down by decrease crude costs and a stronger ruble.
Rosneft PJSC, the state-controlled large accounting for greater than a 3rd of Russia’s whole oil manufacturing, reported 245 billion rubles ($3 billion) of web earnings within the first six months of the yr, down by over 68% from the identical interval in 2024, the producer stated in an announcement on Saturday.
“The primary half of this yr was characterised by decrease oil costs, primarily because of the overproduction of oil,” Rosneft Chief Government Officer Igor Sechin stated within the assertion. “As well as, there was an growth of reductions on Russian oil because of the tightening of EU and US sanctions restrictions and a big strengthening of the ruble trade charge, which negatively affected the monetary outcomes of all exporters.”
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The hunch follows weaker outcomes from Rosneft’s Russian friends. Earlier within the week, Lukoil PJSC, the nation’s second-largest oil producer, and Gazprom Neft PJSC, the oil arm of the nation’s gasoline large Gazprom, each reported a greater than 50% year-on-year slide of their first-half revenue. Smaller rival Tatneft PJSC noticed a 62% drop.
Decrease international crude costs undermined income for oil majors internationally within the first half of the yr amid fears of a worldwide glut. OPEC+ is returning curtailed provide to the market sooner than anticipated, whereas US President Donald Trump’s tariff coverage threatens to gradual the worldwide economic system.
It’s unclear how a lot of the slide in revenue was right down to western sanctions and restrictions on Russia, which had been imposed in response to the battle in Ukraine to chop the Kremlin’s entry to funds for the battle.
Urals, Russia’s key export mix, averaged $58 a barrel within the first half of this yr, down by over 13% from a yr in the past, based on Bloomberg calculations primarily based on Argus Media knowledge.
On the identical time, the ruble appreciated by virtually 23% to 78.4685 per US greenback as of June 30 from the top of final yr, as Russia’s key rate of interest remained close to a file excessive. The strengthening meant Russian producers acquired fewer rubles for every barrel pumped and bought.
Whereas the Russian central financial institution decreased borrowing prices by a complete of 300 foundation factors over conferences in June and July, the tempo of the cuts is “clearly inadequate,” Sechin stated.
“One of many penalties of sustaining the important thing rate of interest at an elevated stage for a very long time is the extreme appreciation of the ruble, which results in losses for each the Russian finances and exporting corporations,” he stated. It additionally results in a rise in debt-servicing prices, worsening the monetary stability of company debtors and undermining funding potential, he added.
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