Logistics, transport, insurance, credit organizations have benefited from spike in oil prices - Rosneft CEO Sechin
MOSCOW. April 1 (Interfax) - The current beneficiaries of the spike in oil prices are primarily logistics, transport, and credit organizations, as well as insurance companies, Rosneft CEO Igor Sechin said.
"The oil market has reacted sharply to the escalation in the conflict between the United States and Iran and the resulting de facto blockade of the Strait of Hormuz following two months of moderately low prices. Meantime, the effect of the current spike in prices on oil industry revenues, which is largely offset by rising costs for freight, insurance, and currency conversion, cannot be overestimated," Rosneft's press service quoted Sechin as saying.
"The Russian oil industry found itself at the epicenter of a perfect storm in 2025, arising from the confluence of unfavorable market conditions, stringent domestic macroeconomic conditions, and an aggressive geopolitical environment," Sechin noted.
Despite these challenges, the industry continues to play a leading role in ensuring socioeconomic development and budget revenues for Russia, Sechin emphasized. The contribution comes from the mineral extraction tax (MET) and the excess profit tax (EPT), as well as from other fiscal payments by oil companies, namely from profit tax, excise taxes on petroleum products, property tax, and others; and from a wide range of revenues from related industries, namely from metallurgy, machine engineering, oilfield services, construction, transportation, electricity generation, and others, he said. Furthermore, substantial revenue sources for Russia's budget include personal income tax and insurance premiums from employees in the oil and related industries, as well as dividends from oil and gas companies, Sechin added.
"The oil industry's total contribution to budget capacity is twice as high as the oil and gas revenue figure calculated by the Finance Ministry," Sechin emphasized.
"Given the ruble liquidity shortage, the industry essentially subsidizes the domestic market with foreign currency, which maintains the ruble's exchange rate stability and serves as a factor in curbing inflation," Sechin said.
The industry's strategic importance renders it a key target for sanctions pressure. The U.S. has imposed blocking sanctions on major oil companies, and pressure from European countries, including embargoes and price caps, is growing, Sechin said. Systemic pressure on key buyers of Russian energy is implemented through sanctions against the tanker fleet and mass denials to insure vessels, which has led to a tenfold rise in insurance premiums, and the increased risks of detention or direct forcible seizure of vessels has exacerbated the situation, he noted. Freight rates to transport Russian oil from the Baltic Sea to India exceeded $20 per barrel in March 2026.
"This represents a tenfold rise in logistics costs compared to early 2022, when delivery to traditional European markets cost around $2 per barrel," Sechin explained.
"I would also like to highlight the blocking of cross-border payments, as the Central Bank of Russia has yet to create a sanctions-resistant international settlement system, and Russian exporters and their counterparties are independently responsible for finding solutions for foreign trade settlements. This has led to a multiple increase in total payment and conversion costs compared to pre-crisis levels," Sechin said.
Along with financial, logistical, and technological barriers, terrorist attacks on oil infrastructure facilities such as refineries, storage facilities, filling stations, terminals, and pipelines are destabilizing the industry, Sechin added.
The current market and geopolitical environment substantially affected the company's financial performance in the reporting year, Sechin noted.
"The drop in oil prices, widening discounts, production restrictions under the OPEC+ agreement, as well as systematic restrictions on the part of Transneft on the intake of crude into the pipeline system, coupled with the strengthening of the national currency, led to a reduction in sales revenue. The outpacing inflation growth of tariffs from natural monopolies and the increasing complexity of cross-border payments and logistics boosted expenses, negatively affecting EBITDA for 2025," Sechin explained.
"The Central Bank's extremely high key rate is noteworthy, with the average level exceeding 19% in 2025. This led to a marked increase in debt servicing costs, which were more than fourfold higher in the reporting year than in 2020, with a comparable net debt level. The increase in the tax rate additionally pressured net profit. Meanwhile, the company did not have to recognize substantial losses in Q4 2025, unlike other sector players, following the imposition of U.S. blocking sanctions, owing to prudent management decisions to minimize the presence in unfriendly jurisdictions proactively," Sechin concluded.
