Russia’s financial system was under siege Monday, but the country is still pumping and exporting vast amounts of oil and natural gas to the rest of the world, delivering cash in the face of Western sanctions and a financial cushion for President Vladimir Putin. At the heart of it lie two London-listed energy giants.

Gas exporter Gazprom PJSC and oil company Rosneft PJSC fund a large chunk of the Russian state and are among the country’s largest employers. Neither have been targeted by major Western sanctions, a sign of their...

Russia’s financial system was under siege Monday, but the country is still pumping and exporting vast amounts of oil and natural gas to the rest of the world, delivering cash in the face of Western sanctions and a financial cushion for President Vladimir Putin. At the heart of it lie two London-listed energy giants.

Gas exporter Gazprom PJSC and oil company Rosneft PJSC fund a large chunk of the Russian state and are among the country’s largest employers. Neither have been targeted by major Western sanctions, a sign of their importance in the global energy markets.

Read live updates on Russia’s invasion of Ukraine

Rosneft says it is Russia’s biggest taxpayer, contributing a fifth of budget revenues. Gazprom paid 2.3 trillion rubles, equivalent to $32 billion, to Russia’s budget in 2020, according to the company. That amounts to around 6% of budget revenues, based on International Monetary Fund data.

The companies aren’t just economically important. In recent months, Mr. Putin deployed Gazprom, the largest exporter of natural gas to the European market, as a geopolitical tool by throttling deliveries to the continent, European officials and analysts have said. That exacerbated an already-growing gas deficit and led to a surge in prices. Russia has consistently denied using energy as a weapon.

The two companies’ shares plunged Monday amid a wider Russian market rout triggered by Western sanctions imposed on Moscow in recent days. The ruble tumbled and Russia’s central bank raised interest rates sharply. London-listed shares of Gazprom fell 53% and Rosneft lost over 42%.

A powerful coalition of democracies announced it would cut off some Russian banks from the global payment system Swift. Here’s how Swift works, and how the move could ramp up pressure on Russian President Putin. Photo Illustration: Dado Ruvic/Reuters The Wall Street Journal Interactive Edition

BP PLC said Sunday it would exit its nearly 20% stake in Rosneft following pressure from the British government, which had cited the Russian company’s links to the Kremlin and accused it of fueling the advance into Ukraine. On Monday, Shell PLC said it will exit its joint ventures with Gazprom, citing Russia’s invasion.

In Europe, “we are at war and we need to consider those companies as an extension of the Russian state,” said Thierry Bros, an energy expert and professor at Sciences Po Paris. “The system will use whatever it has.”

Gazprom and Rosneft didn’t respond to requests for comment.

A disruption in Russia’s energy sales would have widespread repercussions for the global economy, from hitting European businesses and consumers to hurting customers at the pump in the U.S. The European Union gets around 40% of its gas imports and more than one-quarter of its oil from Russia.

Both companies have always denied having a political agenda and insisted they are pursuing legitimate business interests, but in recent years European officials and foreign-policy experts have said Gazprom in particular has been acting as a foreign-policy instrument for the Russian government.

For years, Gazprom has blended furthering its own commercial interests with acting as an agent of the Kremlin, analysts say. The Russian government and companies controlled by it own more than 50% of shares in the company. Gazprom was created in 1989 when the Soviet Union’s Ministry of the Gas Industry was converted to a corporation, retaining most of its assets.

It is run by Alexei Miller, a close ally of Mr. Putin. When he was personally hit by U.S. sanctions in 2018, Mr. Miller said, “Finally I’ve been included. So we are doing everything right.”

In 2006 and 2009, Gazprom cut off gas supplies to Ukraine, causing shortages across Europe. Eastern European officials have said that Gazprom has used the leverage of its dominance of local markets to set high prices. Negotiations often took place on New Year’s Eve, when Gazprom would threaten to stop supplies during winter’s coldest days, officials have said. Gazprom has denied setting unfair prices.

Gazprom is run by Alexei Miller, left, a close ally of President Vladimir Putin.

Photo: alexey nikolsky / sputnik / krem/European Pressphoto Agency

Last year, when gas prices soared in Europe due to low inventories and a surge in demand because of the economic recovery from the Covid-19 pandemic, European officials said Gazprom was deliberately not selling extra gas on the short-term spot market. European lawmakers called for a probe into whether this amounted to market manipulation. Gazprom also operates Nord Stream 2, the now-frozen pipeline project to Germany that would have enabled Russia to circumvent Ukraine’s transit system.

The company and the Kremlin have maintained that they have been meeting their contractual obligations. Gazprom said Monday that it continues regular supply to Europe via pipelines in Ukraine, according to Russian state media.

Europe’s dependence on Russian oil and gas is mirrored by Russia’s reliance on the continent as its biggest energy customer. Gazprom has sought to pivot away in recent years. As part of the Kremlin’s bid for deeper relations with China, Gazprom began delivering natural gas to China through the $55 billion Power of Siberia pipeline in 2019.

Rosneft says it is Russia’s biggest taxpayer, contributing a fifth of budget revenues. An oil drilling rig in a Rosneft oil field near Sokolovka, Russia.

Photo: Andrey Rudakov/Bloomberg News

Beyond gas, the company sponsors various sports clubs in Russia and abroad. German soccer club Schalke 04 said Thursday that it would remove the company’s logo from its jerseys following Russia’s invasion of Ukraine.

In Rosneft’s case, a Russian government-owned company holds more than 40% of shares. Rosneft is run by Igor Sechin, another longtime associate of Mr. Putin. After the Russian annexation of Crimea in 2014, the U.S. and the EU hit Mr. Sechin with sanctions. Mr. Sechin has dismissed the sanctions against him. “I regard Washington’s recent steps as a high assessment of the effectiveness of our work,” he said in 2014.

Moscow has long tried to increase its geopolitical reach through Rosneft. The company has pushed into countries such as Iraq, China, Cuba, Vietnam and Venezuela. The Trump administration in 2020 blacklisted Rosneft subsidiaries for allegedly helping Venezuela sell its oil in violation of U.S. sanctions. U.S. officials accused Rosneft of using dangerous ship-to-ship transfers on the high seas in an effort to hide its actions, with their geolocation transponders turned off to evade detection.

Rosneft has denied breaking U.S. sanctions against Venezuela, despite calling them illegal, and said that it was active in the country long before their imposition. Later, the company said it would halt all activities in Venezuela and sell all its assets related to activities in the country.

Gazprom and Rosneft have also been competing between themselves. Rosneft has long sought to enter the lucrative European gas market, which has been the domain of Gazprom. In December, Mr. Putin ordered the government to work on proposals allowing Rosneft to export gas to Europe.

Write to Georgi Kantchev at georgi.kantchev@wsj.com