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Gazprom Neft, the oil arm of Russian state gas giant Gazprom, reported a 43% annual slump in its second-quarter net profit amid lower sales.
For the first half of 2023, Gazprom Neft’s net income fell by 40% to $3.2 billion (304 billion Russian rubles), but was higher than analyst estimates, according to Russian news agency Interfax.
Last year, Gazprom Neft did not publish an annual results report. Analysts had expected worse performance so far this year than the results the company announced on Thursday, Interfax reports.
For the second quarter of 2023 alone, Gazprom Neft’s net profit dipped by 43% to $1.5 billion (140.1 billion rubles). Revenues were also lower, as sanctions on Russia’s exports, and the lower oil prices this year compared to last year’s highs in the spring, resulted in a decline in realized prices for the company’s production.
This past quarter, all major companies in the West also reported lower earnings, primarily due to the lower crude oil prices compared to the triple digits seen last year after the Russian invasion of Ukraine.
Russia’s total crude oil exports by sea slumped to a 21-month low in July, according to estimates by Energy Intelligence from earlier this week. Last month, Russia was estimated to have shipped 4.62 million barrels per day (bpd) of crude, the lowest level since November 2021.
It looks like Russia is trying to abide by its pledge to reduce its crude oil exports in August and September. Russia has promised a cut to its shipments by 300,000 bpd in September after a 500,000 bpd reduction in August.
Total Russian crude oil and refined products exports remained steady at around 7.3 million bpd in July, while higher oil prices and narrower price differentials for Russian crude pushed Moscow’s revenues higher compared to June, according to estimates by the International Energy Agency (IEA).
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com