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Ukraine defied US sanctions after war, Russian oil company made record profit



Strong points

Rosneft, Russia’s top oil producer, reported a profit of $7.22 billion
The United States imposed harsh sanctions after Moscow launched a special military operation in Ukraine
The Russian company’s debt is also down 12% from the start of the year

Moscow, Defying US sanctions, Russia’s top oil producer Rosneft on Thursday reported a 13% increase in its half-year net profit to 432 billion rubles ($7.22 billion). Russian oil companies have faced Western sanctions after an attack on Ukraine disrupted global trade and Russia’s trading system. According to a report by Reuters news agency, Rosneft Chief Executive Igor Sechin said in a statement that the company managed to perform well despite unprecedented pressure from adverse external factors and illegal sanctions.

Since the beginning of a special military operation by Moscow in Ukraine on February 24, Russia has seen Western investments leave the country. In this episode, the British oil company BP announced in February that it was giving up its 19.75% stake in Rosneft, worth $25 billion. Due to the departure of BP, it was believed that the Russian oil company could suffer heavy losses. However, Rosneft made a profit despite the sanctions, due to a 5.7% increase in oil sales in the January-June period. Also, the company’s debt has also decreased by 12% compared to the beginning of the year.

Cheap oil is the main reason
Despite the embargo, Russia has offered to give its oil to big countries like India and China at cheap prices. Moreover, after the rise of the dollar, Russia gave the possibility of dealing with these countries in the national currency itself, thanks to which many countries bought oil without giving dollars. At the same time, the sanctions did not have much effect on Russia. Let us tell you that Rosneft produced up to 4.85 million barrels of oil per day in the first half, an increase of 1.5% over the previous year.

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FIRST POST: September 15, 2022, 2:50 PM IST