Shares of Rosneft and Lukoil fell on the Moscow Exchange after Russia's two largest oil companies were hit with US sanctions.
Points of attention
- Analysts foresee a reduction in counterparties and potential supply disruptions to foreign markets for Rosneft and Lukoil due to fears of secondary sanctions following the US Treasury Department's decision.
- The sanctions against Rosneft and Lukoil, as well as their subsidiaries, could further impact their trading operations and international supply chains, creating additional hurdles for the oil giants.
Rosneft and Lukoil lost $5.2 billion in two days
According to stock exchange data, in two days — Thursday and Friday — the total capitalization of Rosneft and Lukoil decreased by 424 billion rubles, or $5.2 billion.
Rosneft shares as of November 20 (Moscow time) were trading at 389.85 rubles per share, 3% lower than before the sanctions were imposed. And during trading they fell to 383.15 rubles, the lowest since May 2023. As a result, the company's market value fell by 127 billion rubles, or $1.56 billion.
Lukoil shares fell by 7.2% in two days, or 297 billion rubles ($3.66 billion at the official Central Bank exchange rate).
The main owner of Lukoil, Russia's richest billionaire Vagit Alekperov, who owns a 28% stake, became poorer by 83 billion rubles, or just over $1 billion, in two days.
According to the results of the first half of the year, Rosneft and Lukoil have already faced a sharp deterioration in financial indicators: the former's profit fell threefold, the latter's — twice.
Falling under US Treasury sanctions will exacerbate the problems of these oil companies: the number of counterparties may decrease due to fears of secondary sanctions, and as a result, supplies to foreign markets may decrease, write analysts at Alfa-Bank.
Not only Rosneft and Lukoil themselves have been hit by US sanctions, but also 30 subsidiaries of the former and 6 of the latter. The US Treasury Department's decision may also lead to the curtailment of Lukoil's trading operations through its trading unit in Dubai (Litasco Middle East), while Rosneft faces supply problems to India.
On October 22, the US Treasury Department announced the introduction of sanctions against two of Russia's largest oil companies, Rosneft and Lukoil. At the same time, Washington called on Moscow to immediately agree to a ceasefire in Ukraine.
