Igor Sechin, the powerful head of Russia’s largest oil company, Rosneft, has downplayed the disagreement with Saudi Arabia that led to a dramatic fall in oil prices, and he predicted a quick rebound sometime this year as U.S. shale production is knocked out, Lenta.ru reports.
The Rosneft CEO told state media in a televised interview this week that the so-called OPEC+ group had lost its significance in balancing the global oil market as countries including the United States, Brazil, Norway, and Mexico raised production at its expense.
“Is there any point in cutting production in the future if other countries are going to increase it?” he asked.
At a meeting of OPEC+ members on March 6 in Vienna, Russia informed Saudi Arabia it would not agree to its request for another production cut to support oil prices amid a fall in global demand caused largely by the effects of the coronavirus pandemic.
Sechin, a close associate of President Vladimir Putin, was reportedly behind Russia’s decision. Russia is a key member of OPEC+, which includes the 13-country OPEC cartel and several independent oil-producing states, but not the United States.
Riyadh, angered by Moscow’s stance, announced the following day it would ramp up production by about 20 percent, causing the biggest one-day fall in oil prices in nearly three decades.
Riyadh’s “shock-and-awe” move — seen as an attempt to get Moscow back to the negotiating table — has sent Russia’s currency tumbling roughly 20 percent to a near record-low of 80 rubles to the U.S. dollar.