…to avoid oil price wars
Hector Igbikiowubo
22 May 2017, Sweetcrude, Houston – An oil and gas expert and former Russian Energy Minister Igor Yusufov has advocated a Russian/American commercial energy summit to plan coordinated oil deliveries avoiding unnecessary “price wars”.
He said the agenda of the summit will in due course comprise the prospects and challenges of American shale exports.
“And we will for sure find a way: according to expert studies of the $3 bln Fund Energy I founded 6 years ago the economic growth in Europe and first of all in Asia permits us to plan coordinated oil deliveries avoiding unnecessary “price wars”.
“Our American counterparts can remember the two successful Russian-American Commercial Energy Summits I had the honor to co-organize in 2002 and 2003,” he noted.
Yusufov discountenanced the prospects of American Shale producers taking advantage of OPEC/non-OPEC countries production cuts to increase production and usurp their market share noting that this move is contrary to business-oriented principles
He noted that President D.Trump has declared economic pragmatism as one of the highest values of American politics, adding “since I have personally known his Secretary of State R.Tillerson as a master of pragmatic decisions, it will be the USA that will avoid a global and uncontrolled oil price fall.
On the price range that will determine the point of market stability, he explained that the
Russian state budget is calculated on the $40 a barrel oil price, adding that oil price stabilization around $51-$55 would fully satisfy the needs of both Russian state and private oil companies.
“According to the calculations of Fund Energy experts, the prolongation of the OPEC/non-OPEC deal to another 9 months will result in a stabilization of the Urals price at the level of $51-$53 per barrel against $41 calculated for 2017- 2018.
Mr. Yusufov described the lack of a global mechanism to encourage cooperation between OPEC and non-OPEC countries as another dilemma the world has been facing for many decades.
“Is energy diplomacy sui juris, or adequate? In my opinion, the OPEC/non-OPEC mechanism Dr. Rilwanu Lukman, former OPEC Secretary-General, Ali Rodrigues and I launched 16 years ago proved its effectiveness under qualitatively new conditions of hydrocarbons production diversification and globalization. If the crude production cut works for another 9 months, we will be privileged to speak of it as a strong market stabilization measure. And let me repeat it once more: if the United States join our measures, then it will provide with the new quality of globalism,” he said.