Rosneft CEO Igor Sechin: US loses leadership, wants to maintain it by intensifying conflicts and the world is witnessing the coming of a new coal era

The 17th Verona Eurasian Economic Forum.
Photo: Neftegaz.ru

The US has lost its leadership in science, industry, and finance and has failed to maintain a fair world order. By unleashing various conflicts, the US is trying to create special conditions for its economy at the expense of other market participants, Rosneft CEO Igor Sechin said at the 17th Verona Eurasian Economic Forum, TASS reports.

"It is also obvious that the US has allowed itself to lose its leadership in the scientific, technological, industrial, and financial spheres, which was hard to imagine 20-30 years ago," Sechin noted. According to him, the US has failed to exercise its assumed leadership and has not created the necessary conditions for maintaining a fair world order.

Lasing its influence, the US is betting on creating special conditions for its economy at the expense of other market participants, including its allies, Sechin added. "Conflicts are being deliberately aggravated and created in the Middle East, Ukraine, Latin America, and the Asia-Pacific region," he stressed.

Sechin added that continued restrictions on dollar settlements in world trade will increase the opportunities for using national currencies and developing new universal instruments. Gold can again become the dollar's main competitor in global trade.

"Using the dollar as an instrument of sanctions is a big mistake, because trade will never stop. Both energy security and life in general depend on it. Alternatives will always be found. Gold will be the dollar's main competitor, which mankind has been using for thousands of years for settlements," Sechin said.

Oil producers globally project stable growth of oil consumption that may reach up to 20 mln barrels per day by 2050, Igor Sechin said. "More long-term forecasts vary enormously depending on how biased those who make them are. We see that the sector overall projects stable growth of oil consumption, which may reach up to 20 mln barrels per year by 2050."

The expected growth of oil demand makes investments in crude production particularly important, Sechin noted.

Rosneft plans the first stage of commissioning of the Vostok Oil project in 2026 as the situation on the global oil market is expected to improve, Igor Sechin said.

"2026 will be better, the dynamics will be more positive, which should be taken into account as well. The resource base will deteriorate. Overall the necessity to increase consumption will arise. We plan the first stage of Vostok Oil’s commissioning in 2026," he said.

Vostok Oil is the flagship project of Russia’s oil major Rosneft. It comprises 52 license areas in Arctic Russia with thirteen oil and gas fields therein. The resource base of the project exceeds 6.5 bln tons of sweet oil. It is planned to supply 115 mln tons of oil from the project by 2033. The oil terminal in the North Bay Port will provide for oil throughput from project fields for further shipment by tankers along the Northern Sea Route.

At the 17th Verona Eurasian Economic Forum Igor Sechin showed the famous painting “The last day of Pompeii”.

Rosneft considers the price of Urals oil of $45-50 per barrel appropriate for itself, which allows drawing up the budget of the company’s output program, Chief Executive Officer Igor Sechin said.

"I would take $45-50 per [barrel of] Urals for minimizing those risks, for the budget, for drawing up the budget of our production program," he said.

Sechin also mentioned a number of risks that may influence the global oil market in 2025-2026, including growth of output in the US from the current 13.4 mln barrels per day by another 400,000-600,000 barrels due to employment of a new oil and gas production technology and President-elect Donald Trump’s promise to cut corporate taxes to 15%, as well as interest rates.

Moreover, the market may lose around 1 mln barrels per day of supplies from Iran if the sanctions pressure on the country is intensified. However, Saudi Arabia still have a reserve of another 1 mln barrels per day. "How they will be used is another serious factor," Sechin said.

Much also depends on the volume of China’s consumption that totals 15.6 mln barrels per day. Beijing currently plans priming of economy, Rosneft’s chief executive noted. "Should this happen consumption in China will obviously rise, which will create additional opportunities for supplies to China," he said.

Oil production in the world needs to be almost doubled in order to raise living standards in developing countries, Igor Sechin said.

"In order to raise the standard of living in developing countries to at least half the level of the ‘golden billion’, it is necessary to increase oil production almost twofold," he said.

Sechin noted that energy demand is growing today in developing countries, where 750 mln people still have no access to electricity. "At the same time, per capita energy consumption in the United States is three and a half times higher than the average consumption on the planet and 10 times higher than India's consumption. Meanwhile, per capita demand in Europe exceeds the same indicator in Africa almost 10 times," he added.

According to him, the high efficiency of the modern energy system has led to the fact that global energy consumption has increased 1.5 times in the last 20 years alone.

Continued restrictions on dollar settlements in world trade will increase the opportunities for using national currencies and developing new universal instruments. Gold can again become the dollar's main competitor in global trade, Igor Sechin said.

He also added that the US has lost its leadership in science, industry, and finance and has failed to maintain a fair world order. By unleashing various conflicts, the US is trying to create special conditions for its economy at the expense of other market participants.

Having lost its influence, the US is betting on creating special conditions for its economy at the expense of other market participants, including its allies, Sechin added. "Conflicts are being deliberately aggravated and created in the Middle East, Ukraine, Latin America, and the Asia-Pacific region," he stressed.

The announced energy transition program is a powerful sanctions barrier for the 88% of the world's population who are not part of the "golden billion", Sechin said.

"The United States intends to stimulate the desire of its partners to combat climate change with the help of very weighty arguments: countries that refuse to promote the American-centric ‘green’ agenda will have to pay import duties," Sechin said.

"This confirms our idea that the announced energy transition program is essentially a powerful sanction barrier for 88% of the world's population, for everyone who is not among the ‘golden billion’," he added.

At the same time, the West's enthusiasm for renewable or so-called green energy has almost disappeared, Western oil giants are stopping projects to produce alternative fuels, Sechin noted.

"In real life, business votes with money, and the ‘green’ dollar runs away from the ‘green’ agenda like fire. Over the past three years, the enthusiasm of Western stock markets for the renewable energy sector has all but disappeared. Shares of companies that produce 'clean' fuels have fallen several times in the past two years," he said.

Russia and its OPEC+ partners have made the biggest contribution to stabilizing the energy market over the past 10 years, often sacrificing their own interests, Igor Sechin said.

"Recently, Russia has regularly heard unfounded accusations of undermining the foundations of the energy market. However, over the past decade, our country and its partners have made the greatest contribution to stabilizing the global energy market, often at the expense of our own strategic interests," he said.

Sechin recalled that in 2016, OPEC's share of the oil market fell to 36%. It was then that Russia and its partners created OPEC+, whose share was 55%. "This allowed us to stabilize the market and protect the interests of producers," he stressed.

According to him, the OPEC+ decisions to stabilize the oil market in 2016 and 2020 significantly supported the US shale industry. "By that time, US shale producers had already squandered more than $300 bln of their shareholders' capital and accumulated debt of almost another $200 bln," he noted.

Losing its influence, the US is betting on creating special conditions for its economy at the expense of other market participants, including its allies, Sechin added. "Conflicts are being deliberately aggravated and created in the Middle East, Ukraine, Latin America, and the Asia-Pacific region," he stressed.

At the same time, Sechin believes that the US has lost its leadership in science, industry, and finance and has failed to maintain a fair world order. By unleashing various conflicts, the US is trying to create special conditions for its economy at the expense of other market participants.

The world is witnessing the coming of a new coal era, including due to the high energy efficiency of investments in fossil fuels, Igor Sechin said.

"Experienced investors have returned to coal. In fact, we are witnessing the coming of a new coal era," Sechin said. As an example, he cited Glencore, which has received half of its operating income from its coal business over the past two years.

At the same time, Sechin believes that the world is still far from peak demand for fossil fuels.

"Oil accounts for more than 30% of global energy consumption, coal - 25%, gas - 22%, and apparently we are still far from peak demand for fossil fuels," he said.

The value of the US financial assets is six times higher than the value of the assets of its real economy, Igor Sechin said.

"A huge liquidity bubble has led to a flow of wealth from the real economy to the financial sector. Today, the value of American financial assets is six times higher than the value of assets in the real economy," he said.

According to Sechin, all this has led to the uncontrolled growth of the US national debt. "Since March 2020 alone, the US federal budget debt has grown more than in the previous 200 years. As a result of this policy, last year the US national debt to GDP ratio came very close to 100%. So far, we have not seen any real steps to limit this growth," he noted.

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