Moscow, Moscow, Russian Federation
The Department of the Economic and Financial Strategy Moscow School of Economics
Moscow, Moscow, Russian Federation
Many Russian energy companies, including the PJSC Oil Company “Rosneft”, faced sanctions pressure, which required to upgrade their strategies based on combining traditional mechanisms in the volatile oil market and new long-term strategic principles in emergency periods. Developing a strategy is quite challenging in a changing environment, when the company competitive advantages are under pressure not only due to market factors, but also due to the introduction of sanctions with the aim to limit access to certain markets, primarily European, the introduction of price caps and increased transaction costs. Various sanctions, including the expansion of the SDN and SSI lists, and their impact on the Russian economy are considered. Additional restrictions, for example, connected with climate change and fossil fuel limitations, create additional pressure for oil business and require updating strategies. Nevertheless, the Russian companies and “Rosneft”, in particular, could apply different adaptive strategies, market diversification, reorientation of their exports to new regions through new logistical channels, rely on settlements and investments nominated in national currencies, as well as new innovative financial instruments, strengthening government support to maintain production, and substitute Western technologies with national or alternatives solutions. It is important for “Rosneft” to invest in expanding resources base through exploration of new oil fields, mergers and acquisitions with other companies inside Russia, like the deal with JSOC “Bashneft”, as well as in other friendly countries, to propose new premium products on internal markets. But it is essential to create additional flexibility (options) for production volume for the global market, where the demand is influenced by sanctions. So, the investment activity in emergency and sanction periods should be more agile, supporting an organic growth for internal market and at the same time increasing possibilities to change supply (including decrease) for the international market. The trends analyses, OTSW framework, econometric model to confirm correlation between EBITDA of “Rosneft” with the Global Political Risk Index, oil prices, and other variables, demonstrate that “Rosneft” has an agile strategy, allowing the company to overcome challenges, be flexible and at the same time consistent with its long-term corporate goals.
strategy, sanctions, oil sector, “Rosneft”, national currency settlements, mergers and acquisitions
1. Albin IN. Strategic challenges and threats of emergency periods, their negative impact on economic sustainability and quality of life. Russian Journal of Industrial Economics. 2024;17(2):138–145. (In Russ.) https://doi.org/10.17073/2072-1633-2024-2-1300
2. Astapov KL. Postindustrialʹnye vyzovy rossiyskoy ehkonomike [Post-industrial challenges to the Russian economy]. Moscow: TEIS; 2009. 270 p. (In Russ.)
3. Astapov KL. Russian financial market development strategic initiatives under sanctions and in the aftertime. The world of new economy. 2022;16(4):99–112. https://doi.org/10.26794/2220-6469-2022-16-4-99-112
4. Kvint VL, Novikova IV, Alimuradov MK, Sasaev NI. Strategizing the national economy during a period of burgeoning technological sovereignty. Administrative Consulting. 2022;(9):57–67. (In Russ.) https://doi.org/10.22394/1726-1139-2022-9-57-67
5. Kvint VL. Strategizing: Theory and practice. Collection of selected research articles and proceedings of the Eighth International Research-to-practice Conference. Volume XVI. Moscow Strategic Universitarium. Moscow: Lomonosov Moscow State University; 2025. 436 p. https://elibrary.ru/MDNYNQ
6. Shvyrkov YuM. Gosudarstvennoe indikativnoe planirovanie: teoriya, istoriya, sovremennaya praktika: (rossiyskiy i zarubezhnyy opyt) [State indicative planning: theory, history, and modern practice in Russian and foreign experience]. Moscow: Prospekt; 2007. 345 p. (In Russ.)
7. Astapov KL. Strategy of M&A deals in oil industry (on example of «Rosneft» and «Bashneft» deal). Russian Journal of Industrial Economics. 2020;13(2):137–148. https://doi.org/10.17073/2072-1633-2020-2-137-148
8. Black F, Scholes M. The pricing of options and corporate liabilities. Journal of Political Economy. 1973;81(3):637–654. https://doi.org/10.1086/260062
9. Caldara D, Iacoviello M. Measuring geopolitical risk. American Economic Review. 2022;112(4):1194–1225. https://doi.org/10.1257/aer.20191823
10. Hufbauer GC, Schott JJ, Eliott KA, Oegg B. Economic sanctions reconsidered. 3rd ed. Washington: The Peterson Institute for International Economics; 2007. P. 234.
11. Friedman D. Evolutionary economics goes mainstream: A review of the theory of learning in games. Journal of Evolutionary Economics. 1998;8:423–432. https://doi.org/10.1007/s001910050071
12. Giumelli F. Coercing, Constraining and Signalling: Explaining UN and EU Sanctions After the Cold War. Colchester: ECPR Press; 2011. 226 p.
13. Grant RM. Contemporary strategy analysis: Text and cases edition. Chichester: John Wiley & Sons; 2016. 776 p.
14. Su CW, Qin M, Tao R, Moldovan NC. Is oil political? From the perspective of geopolitical risk. Defense and Peace Economics. 2019;32(4):451–467. https://doi.org/10.1080/10242694.2019.1708562
15. Kvint VL. Strategy for the Global Market: Theory and practical applications. NY: Routledge; 2016. 548 p. https://doi.org/10.4324/9781315709314
16. Kvint VL. The global emerging market: Strategic management and economics. NY: Routledge; 2009. 488 p. https://doi.org/10.4324/9780203882917
17. Mitsas S, Golitsis P, Khudoykulov K. Investigating the impact of geopolitical risks on the commodity futures. Cogent Economics and Finance. 2022;10(1):2049477. https://doi.org/10.1080/23322039.2022.2049477
18. Nelson RR, Winter SG. An evolutionary theory of economic change. Cambridge: The Belknap Press of Harvard University Press; 1982. 452 p.
19. Overland I, Poussenkova N. Rosneft: Lord of the rings. Russian Oil Companies in an Evolving World. Cheltenham: Edward Elgar Publishing Limited; 2020. P. 24–58. https://doi.org/10.4337/9781788978019.00013
20. Borodin A, Panaedova G, Ilyina I, Harputlu M, Kiseleva N. Overview of the Russian oil and petroleum products market in crisis conditions: Economic aspects, technology and problems. Energies. 2023;16(4):1614. https://doi.org/10.3390/en16041614
21. Panibratov A. Sanctions, cooperation, and innovation: Insights into Russian economy and implications for Russian firms. BRICS Journal of Economics. 2021;2(3):4–26. https://doi.org/10.38050/2712-7508-2021-3-1
22. Porter ME. The five competitive forces that shape strategy. Harvard Business Review. 2008;86(1):78–93.
23. Prahalad CK, Hamel G. The core competence of the corporation. Harvard Bisuness Review. 1990:14.
24. Schumpeter JA. The theory of economic development: An inquiry into profits, capital, credit, interest, and the business cycle. Cambridge: Harvard University Press; 2011. 244 p.
25. Shagina M. Sanctions and Moscow’s adaptation strategy. Russian Energy Strategy in the Asia-Pacific: Implications for Australia. Canberra: ANU Press; 2021. P. 183–199. https://doi.org/10.22459/RESAP.2021.08
26. Lu Z, Gozgor G, Huang M, Lau CKM. The impact of geopolitical risks on financial development: Evidence from emerging markets. Journal of Competitiveness. 2020;12(1):93–107. https://doi.org/10.7441/joc.2020.01.06
27. Toffler A. Future Shock. NY: Random House; 1970. 198 p.
