Current oil price in rubles challenging for Russia, but financial models remain viable in medium term

The current oil price allows Russia to continue investment in oil production, and although the ruble's strengthening makes the situation challenging from a financial modeling perspective, the focus should be on the longer-term outlook, Russian Deputy Prime Minister Alexander Novak told reporters, as per Interfax.

"Yes, the current price enables continued investment. Of course, given the ruble's strengthening, the situation is indeed more challenging from a financial modeling standpoint. But we don't look at the immediate term - financial models account for annual average prices, meaning a medium-term perspective, so we should evaluate over a period rather than at a specific moment," Novak said.

All countries have different production costs depending on their extraction structure and costs, he said. "Everyone has different, let's say, investment decision thresholds, which also relates to financing availability, not just geological conditions. So we can't currently say what price would be acceptable for everyone," he said.

Russia continues investing in oil production "because without this we couldn't even maintain current production levels," he said.

"Investments go towards sustaining production and developing new projects and fields. For us, this largely depends not just on oil prices but also on the ruble exchange rate, since our costs are in rubles. We need to consider what a conventional tonne of oil costs in rubles - financial models are built accordingly," he said.

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The six-year option for France's Renault automaker to return to the shareholders' interests of Russia's Avtovaz and Avtoframos remains in effect, though everything thus far seems to be moving toward the company not being able to implement these actions, First Deputy Prime Minister Denis Manturov said during an interview with RBC, as per Interfax.

"We will definitely account for the criterion despite their having [concluded] an option for six years as of 2022, when they signed the agreement on the company's exit from the shareholders' interests of both Avtovaz and Avtoframos, which is now Moskvich, in Moscow. Everything thus far has been approaching the point that they have been doing and are conducting the option so that it is not possible to implement it," Manturov said in response to reports on Renault's plans to manufacture drones in Ukraine and the effects on the company returning to Russia.

"Firstly, they have interrupted all chains related to collaborative deliveries and have not provided any assistance regarding Avtovaz. Secondly, as you just said, this is an unfriendly action. Firstly, the Renault company as a whole supplies equipment [to Ukraine], and we know and see this. When statements come from these public sources, then we would definitely take the criterion into account as well," Manturov said.

Manturov also spoke about the assumption that Toyota, Hyundai, and Kia, respectively, could be discussing resuming operations in Russia.

"I have not actually received any information from either Hyundai or Toyota regarding their return, as I am still proceeding from official sources, and from the correspondence or interaction that we had previously. However, our relations have been completely interrupted since 2022, both along the line of one structure and along the line of another. Therefore, I would be able to give a corresponding comment if they were to resume interaction with us," he said.

Contacts have been maintained with Western companies, U.S. and European alike. U.S. companies have said that they are interested in implementing options to return overall, Manturov said.

"I honestly have not met with foreign manufacturers myself in the last few months, though these meetings occur periodically at the Industry Ministry. The U.S. companies that have continued operating here and those companies that have left the Russian market, though have an option, have been saying that they would like to return and exercise this option. The [Russian] president spoke about this, and I commented on this in terms of the rules that they would be the same for everyone," Manturov said.

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Oil market volatility benefits no one, and OPEC+ supports stable market development, demand growth and the security of supply, Russian Deputy Prime Minister Alexander Novak said at the 2025 St. Petersburg International Economic Forum (SPIEF 2025), as per Interfax.

When asked by the moderator whether Russia would cooperate with Saudi Arabia to secure the market if Iranian oil were to exit it, Saudi Energy Minister Prince Abdulaziz bin Salman said, "You're asking about something that isn't happening in the market."

"We can only react to reality," he said. OPEC+ has always been a reliable, serious and effective organization that closely monitors market developments, and Russia and Saudi Arabia are just two members of a broader alliance and cannot speak for all, he said.

For his part, Novak expressed hope that the situation in the Middle East will stabilize. "We need to observe how events unfold. Ideally, the situation should stabilize - market volatility benefits no one. We support stable development, demand growth, and secure market supply. This ensures investment stability, enables economic growth for oil-producing nations and facilitates technological advancement," he said.

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Yamal LNG produced over 21 million tonnes of liquefied natural gas in 2024, Novatek reported at its stand at the St. Petersburg International Economic Forum (SPIEF) 2025, as per Interfax.

The Federal State Statistics Service (Rosstat) had previously reported that 34.7 million tonnes of LNG were produced in Russia last year. Sakhalin Energy LLC shipped 10.2 million tonnes.

Most of the liquefied natural gas in Russia is produced in the Arctic zone, with production most efficient at subzero winter temperatures.

The Sakhalin Energy plants, co-owned by Gazprom and Japan's Mitsui and Mitsubishi; Yamal LNG, whose participants are Novatek and TotalEnergies ; China National Petroleum Corporation (CNPC) and SRF; Cryogas-Vysotsk; and Gazprom LNG Portovaya produce large-scale LNG in Russia.

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Versalis SpA, the chemicals business of Eni Spa, said it is in the design phase for a 40,000 metric tons per year plant planned to be built at Priolo, Italy, for the chemical recycling of mixed waste plastics, as per Chemweek.

The company, which announced June 19 it had successfully completed initial production tests at a demonstration chemical recycling plant in Mantua, Italy, with a nameplate processing capacity of 6,000 metric tons per year of secondary raw materials, said it has already completed a feasibility study for the larger project.

Versalis said the design phase for the larger plant at Priolo is under way “in preparation for the start of the permitting process.” A scheduled startup and investment amount for the project were not given.

The demo project is based on Versalis’ proprietary Hoop recycling technology, which converts the mixed waste polymers into feedstock for reuse in the production of new plastics. The pyrolysis process was developed via a joint project of Versalis with Italian engineering firm Servizi di Ricerche e Sviluppo (SRS).

Construction of the demo plant at Mantua began in late October 2023 after the project was first announced in February 2020, with production originally scheduled to start by the end of 2024.

In April, Versalis announced it had implemented the permanent closure in March of its naphtha cracker at Brindisi, Italy, and that its last remaining steam cracker in the country at Priolo would close before the end of the year.

The cracker closures are in line with Eni’s plans announced in October last year for a €2 billion transformation and decarbonization program for its chemicals business aimed at restoring its competitiveness and returning it to profitability.

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