Dragged down by production hikes by Saudi Arabia and other OPEC+ states that led to weaker oil prices, Russia's largest oil producer, Rosneft, saw its first half net income tumble more than 68% to 245 billion roubles (US$3 billion).
Head of Rosneft, Igor Sechin, pointed the finger squarely at production cuts by OPEC+ that spurred an output rise by the United States, which over the past years has become the world's leading oil producer.
“The first half of the year was characterised by a decline in oil prices, primarily due to overproduction of oil. The main reason is the active increase in production by OPEC countries, including Saudi Arabia, the UAE, Iraq, Kuwait,” said Sechin a long-standing ally of President Vladimir Putin.
The Organisation of the Petroleum Exporting Countries and its allies, led by Russia, a group known as OPEC+ - which pumps about half of the world's oil - had been curtailing production for several years to support oil prices – something Russia had reluctantly agreed to.
However, earlier this year, the cartel ramped up production, partly to regain some of the previously held market share and partly at the request of U.S. President Donald Trump.
It’s understood that Ukraine’s decision to strike and paralyse 10 refineries throughout August unwittingly freed up additional crude oil volumes for export.
By shutting down facilities representing 17% of national processing capacity (1.1 million barrels per day), Russia managed to increase its August crude oil exports by 200,000 barrels per day compared to the initial schedule.
It’s now understood that total loadings from Primorsk, Novorossiysk, and Ust-Luga are expected to reach 2 million barrels per day, up from the planned 1.8 million.
According to Rosneft and leading energy agencies, the surplus on the global oil market will reach 2.6 million barrels per day in the fourth quarter, easing to 2.2 million bpd in 2026.
Meanwhile, Exxon is understood to have held secret talks with Rosneft about potentially going back to Russia.
This would mark a dramatic reconciliation after Exxon’s bitter breakup with Moscow following Putin's decision to declare war on Ukraine in 2022.
During his recent meeting with President Trump in Alaska, Putin told the media that Russia and the U.S. could do more business together—for example, between their Pacific coastlines.
Their respective countries’ biggest energy companies are understood to already have sketched out a road map to going back into business, pumping oil and gas fields off Russia’s far-east coast.
In secret talks with Russia’s biggest state energy company this year, a senior Exxon Mobil executive is said to have discussed returning to the massive Sakhalin project if the two governments gave the green light as part of a Ukraine peace process.
A decree signed by Putin on August 15 on the conditions for foreigners to obtain a stake in the operator of the Sakhalin-1 oil and gas project may allow the U.S. oil and gas corporation ExxonMobil to return its stake in the project.
Meanwhile, the United States has internally discussed the possibility of using Russian nuclear-powered icebreaker ships to support the development of gas and liquefied natural gas (LNG) projects in Alaska.
