Rosneft sees declining profits: How Russia’s economy could be hit
Rosneft profitability declines (Photo: Getty Images)
Since the beginning of the year, Rosneft has recorded a sharp decline in financial performance. The collapse in the company’s profitability threatens related sectors of the Russian economy, according to the Ukrainian Foreign Intelligence Service.
Since the start of 2025, Rosneft’s net profit has fallen by 70%, amounting to only $3.51 billion, compared with $11.72 billion for the same period last year.
The company’s revenue decreased by 17.8%. At the same time, production volumes declined: gas extraction fell by 13.1% and oil refining dropped by 7.8%.
According to the Ukrainian Foreign Intelligence Service, the decline was caused by rising costs for counter-terrorism measures, logistics, and maintenance, as well as the shutdown of about 20% of Russian refinery capacity between August and October. Additional burdens included repair and restoration work and the optimization of plant workloads.
In addition, the high key interest rate of the Russian Central Bank increased debt servicing costs. The ruble’s 20–25% appreciation reduced foreign currency revenues from exports, which account for more than 70% of the company’s income.
“The decline in the company’s profit indicates not temporary fluctuations, but a structural deterioration of the Russian oil and gas sector,” analysts from the Intelligence Service say.
They predict that in the medium term, worsening financial results for one of the key enterprises of the Russian economy will lead to problems in related sectors - logistics, oilfield services, and machinery manufacturing.
Decline in Russia’s oil and gas revenues
Earlier reports indicated that Russia’s GDP is falling, along with oil and gas revenues. Military factories are already planning staff reductions. For an analysis of what is wrong with the Russian economy and what is keeping it afloat, read the article by RBC-Ukraine.
In addition, Russian oil prices have collapsed to a more than two-year low even before the US imposed sanctions on Russian oil companies Lukoil and Rosneft.
Bloomberg noted that this drop in oil prices will be a financial blow to Russia and will reduce the funds flowing into the Kremlin’s budget to finance the war against Ukraine.
