Profits from Russia’s largest oil and gas companies fell by 41%

The revenue of the largest oil and gas companies in Russia fell by 41% in January–September 2023.

The Central Bank of Russia announced this in its Financial Stability Review presented on November 30, The Moscow Times reports.

It means that Western sanctions against Russia for Putin’s war against Ukraine are effective and damage the Russian economy.

“This was due to a deteriorating price environment and a decline in oil exports amid tighter sanctions, disruption of supply chains, and financial flows,” the review said.

In the first nine months of 2023, oil exports through the Transneft system decreased by 8%, and the average price of Urals fell by 26%, the Central Bank notes, adding that this year, on average, each barrel was exported for $59.54 and last year for $80.58.

“The introduction of the price ceiling for Russian oil and oil products has accelerated the reorientation of export flows to Asia and Africa, which has caused a rise in logistics and transaction costs. In addition, the risks of secondary sanctions relating to the oil industry remain,” the Central Bank said.

In January–September 2023, Russia’s largest oil and gas exporters reduced net sales of foreign currency by 58%, which “affected the balance of supply and demand for currency in the domestic market,” the authors of the review add.

Gazprom became the “weak link,” losing the European market. The company’s decision to cut off supplies to most customers in the EU resulted in more than a trillion rubles in net losses and a reduction in production by a quarter compared to the pre-war period. Rosneft reported an 8% drop in revenue to RUB 6.612 trillion in the first nine months of 2023.

On November 16, the United States imposed sanctions on three organizations linked to the Russian Federation for exporting Russian oil at inflated prices.

On November 23, it became known that three Greek companies had stopped transporting oil from Russia under pressure from US sanctions.

On November 28, it became known that Russia was facing serious problems in trading its oil in Asia due to the shortcomings of payments for it in currencies other than the US dollar, and there was no solution to these problems in sight.