NVDA Q3 Earnings Alert: Why our AI stock picker is still holding Nvidia stockRead More

Exclusive - Say goodbye to OPEC, Russia’s Sechin says

Published 10/05/2016, 12:18
© Reuters. Rosneft CEO Igor Sechin attends a briefing dedicated to the signing of a contract between Rosneft and Essar Oil Ltd. companies in Ufa

By Vladimir Soldatkin

MOSCOW (Reuters) - Internal differences are killing OPEC and its ability to influence the markets has all but evaporated, top Russian oil executive Igor Sechin told Reuters in some of his harshest remarks ever about the oil cartel.

Russia, which has been hit hard by the oil price collapse, was flirting with the idea of cooperating with OPEC in recent months until tensions between OPEC members Saudi Arabia and Iran ruined a global deal to freeze output.

Sechin - one of the closest allies of President Vladimir Putin - was the only Russian official to consistently oppose the deal with OPEC even after the Kremlin effectively endorsed the plan.

Now that his gloomy predictions about talking to OPEC have come to pass, Sechin feels vindicated and wants to help Russia avoid similar embarrassment in future.

"At the moment a number of objective factors exclude the possibility for any cartels to dictate their will to the market. ... As for OPEC, it has practically stopped existing as a united organisation."

"The company (Rosneft) was sceptical from the very beginning about the possibility of reaching any sort of joint agreement with OPEC's involvement in current conditions," said Sechin, in comments over the weekend which were embargoed until Tuesday.

"Just to remind you, the only one question with which we responded to those who were interested to know our position: 'Who should we agree with, and how?' The development of the situation has clearly shown we were right."

Sechin's comments about the end of the era when OPEC could influence prices chime with those of Saudi Arabia's newly appointed energy minister Khaled al-Falih.

Falih, who took over on Saturday from long-serving Ali al-Naimi, has been very vocal in the past year about his views that the oil market needs to rebalance through low prices and that the Saudis have the resources to wait.

Falih's ultimate boss, Deputy Crown Prince Mohammed bin Salman, who oversees Saudi oil policies, has also signalled that the world is moving to a new era where supply and demand rather than OPEC will determine prices.

Sechin, who was born in 1960 - the same year as Falih - is also calling on Russia to abandon any hope that prices can be fixed by anything other than market rebalancing.

© Reuters. Rosneft CEO Igor Sechin attends a briefing dedicated to the signing of a contract between Rosneft and Essar Oil Ltd. companies in Ufa

"At the moment, key factors which are influencing the market are finance, technology and regulation. We can see this with the example of shale oil which ... became a powerful tool of influence on the global market," Sechin said in the emailed comments.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.