ByJulianne Geiger– Mar 18, 2025, 11:30 AM CDT
Gazprom Neft isn’t losing sleep over Urals crude prices, at least according to CEO Alexander Dyukov. Speaking to reporters, Dyukov said the company considers the current pricing “quite acceptable” in light of the strengthened ruble. Translation? The currency shift is softening the blow of weaker oil prices, keeping the bottom line from bleeding too much red.
For context, Urals crude has been stuck in a price rut thanks to a mix of global oversupply concerns, softening demand, and a shifting geopolitical landscape. But unlike previous downturns, the sting is dulled by a ruble that’s been flexing its muscles ever since Trump waltzed back into the White House.
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Meanwhile, as of March 18, The Russian ruble has strengthened to 81.5 rubles per USD—the highest in nine months. Urals crude oil, on the other hand, is trading just north of $65 per barrel—the lowest level since October.
Oil and Ruble 101
A stronger ruble means that when Gazprom Neft converts its oil revenues from dollars back into rubles, it gets fewer rubles per barrel. On paper, that sounds bad. But in reality, many of Gazprom Neft’s costs—like wages, taxes, and local supply chain expenses—are paid in rubles. A stronger currency lowers the relative cost of operations because fewer rubles are needed to cover expenses, helping balance out some of the revenue hit from lower Urals prices.
This ruble rebound has been fueled in part by some element of seasonality, along with a renewed optimism in Russian financial markets. Trump’s election brought whispers (and maybe some wishful thinking) of softened sanctions and restored trade ties. Recent developments continue to support that possibility. The result was the dollar falling to a six-month low against the ruble, giving Russian firms like Gazprom Neft a financial cushion just as crude prices took a dip.
OPEC+ and the Balancing Act
Of course, Dyukov also made sure to point out that OPEC+ remains a key player in keeping supply and demand in check. The alliance meets monthly, adjusting quotas to prevent oil markets from completely derailing. Gazprom Neft, for its part, isn’t straying from the script—it’ll keep production in line with whatever Moscow’s Energy Ministry dictates.
“Speaking about the OPEC+, its participants gather monthly and make decisions based on the market situation. These decisions are made efficiently, as we have already seen many times. Our task is to implement quotas communicated to the company by the Ministry of Energy,” Dyukov said, according to TASS.
For now, the strong ruble keeps things “acceptable” for Gazprom Neft, even if Urals prices aren’t breaking any records. But if the currency keeps climbing and oil stays sluggish, it won’t just be crude producers watching nervously—it’ll be Russia’s Finance Ministry, as a too-strong ruble could start eating into government revenues.
By Julianne Geiger for Oilprice.com
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