Russia's largest oil company is planning to give out record dividends as sanctions against it intensify.

The company has a secondary listing on the London Stock Exchange and the board recommended a price of 23.63 rubles for the second half of 2021. This brings the full-year dividends to a record high.

The surge in oil prices resulted in a record profit for the company in 2021. 50% of net profit is paid to shareholders. The shareholders will vote on the recommendation on June 30.

The Russian state would be the biggest winner from the payouts. A Russian government-owned company has 40% of the shares of the oil company.

Foreign investors could face challenges in getting paid. Russian President Vladimir Putin has ordered money owed to investors or lenders from unfriendly states to be transferred to special bank accounts in the Russian ruble. If they get special permission, recipients can convert them into a different currency.

The European Union agreed to cut Russian oil imports by the end of the year. The trade bloc has imposed sanctions against Russia.

As Russia is an energy giant, the war in Ukraine has impacted international markets as investors fear supply disruption from the country due to trade restrictions or infrastructure damage. This has led to an increase in oil prices this year.

Russian state-owned gas giant Gazprom proposed its highest-ever dividend last Thursday on the back of record profits.