Russian oil giants Rosneft and Lukoil lose billions after US sanctions
Illustrative photo: Rosneft and Lukoil lost billions amid sanctions (Getty Images)
Shares in Russia's largest oil companies, Rosneft and Lukoil, fell sharply amid US sanctions against them and their subsidiaries. The decline amounted to several billion dollars, according to The Moscow Times.
According to the exchange, in two days, the total capitalization of both companies fell by 424 billion rubles ($5.2 billion). Rosneft shares fell by 3%, and the company lost $1.56 billion. Lukoil's shares fell even more sharply, by 7.2%, causing losses of $3.66 billion.
The main owner of Lukoil, Russia's richest billionaire, Vagit Alekperov, was hit particularly hard. He lost more than 83 billion rubles, or just over a billion dollars, in two days.
At the same time, the agency notes, the problems are only just beginning: Rosneft and Lukoil may lose their contractors and their place in foreign markets. This year alone, the companies have already faced a sharp deterioration in their financial performance several times: the former's profits fell threefold, while the latter's fell by half.
Due to US sanctions, Rosneft and Lukoil may have problems with oil supplies to India (Rosneft) and trading operations in Dubai (Lukoil). The problem is that along with the main companies, 36 of their subsidiaries have also been hit by sanctions, meaning there are almost no loopholes.
Dmitry Polyovoy, investment director at Astra Asset Management, told the agency that export volumes may decline while logistics are being reorganized, and discounts are likely to widen.
Against the backdrop of sanctions, India's largest oil holding company, Reliance Industries, purchased millions of barrels of oil from the Middle East and the US after the US imposed sanctions on two Russian producers. And on the evening of October 24, the holding company de facto confirmed that it would refuse to make further purchases from Russia.
Chinese state-owned oil companies also suspended maritime purchases of Russian oil after large-scale US sanctions against Rosneft and Lukoil. This involves the suspension of supplies of at least 500,000 barrels per day.
On the night of October 23, the US announced sanctions against Russia's two largest oil companies, Rosneft and Lukoil, to force Putin to sit down at the negotiating table with Ukraine. The restrictions apply to the main companies and a total of 36 of their subsidiaries.
