‘Russia losing out to OPEC+ due to different export structure’

Chief Executive of oil producer Rosneft Igor Sechin attends a meeting with Russian President Vladimir Putin at the Novo-Ogaryovo state residence outside Moscow, Russia February 15, 2021. Sputnik/Mikhail Klimentyev/Kremlin via REUTERS/File Photo

– Sechin proposes OPEC+ to monitor oil exports
– Sechin: OPEC will not be able to meet rising oil demand
– Sechin: more difficult for OPEC+ to find common solutions

Moscow — Igor Sechin, head of Russian energy major Rosneft (ROSN.MM), said on Saturday that Russia is losing out to other OPEC+ countries due to a smaller share of its oil production being exported.

Sechin, a longstanding ally of President Vladimir Putin, has said that the oil output boom in the United States, which is not a member of the OPEC+ group, was also wielding more influence on the global oil market than other producers.

Some experts and analysts have noted that Russia’s oil exports are still relatively high despite cuts in production.

Speaking at an economic forum, Sechin said some OPEC+ countries were exporting as much as 90% of their output, whereas Russia supplies the global market with only half of its production.

“That puts our country in a less advantageous position under the current mechanism for assessing the impact and access to key markets,” he said. “In this regard, it seems appropriate to monitor not only production quotas, but also oil export volumes, given the different sizes of domestic markets.”

Currently, the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, regulates only production, not exports.

Amid flagging oil prices, OPEC+ agreed on a new oil output deal earlier this month, while Saudi Arabia, the group’s biggest producer, pledged to make a deep cut to its output in July on top of a broader OPEC+ deal to limit supply into 2024.

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OPEC+ accounts for around 40% of global oil production, while Rosneft takes the same share of Russia’s oil output.

In remarks published later on Rosneft’s website from Sechin’s speech, he said Saudi Arabia is voluntarily cutting oil production, while also increasing production capacity.

He said Saudi Arabia may increase the amount of drilling rigs by at least a quarter in the next two years. As a result, by 2025-2027, Saudi Arabia’s oil producing capacity may rise by around 2 million barrels per day.

Speaking at the forum, Sechin also said it was more difficult for OPEC countries to find common ground due to differences in economic structure and oil production.

“In coming years, humanity will face the problem of production capacities and OPEC countries will no longer be able to meet the growing demand,” he said.

*Olesta Astakhova & Vladimir Soldatkin; Editing: Louise Heavens & David Holmes – Reuters

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This article was originally posted at sweetcrudereports.com

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