Igor Sechin, CEO of Russian oil producer Rosneft, said that he had no doubt that Russia and Saudi Arabia should maintain contact, but questioned the relevance of a production cut deal, according to the RIA news agency.
“I have no doubts that contact should continue. These two (Russia and Saudi Arabia) are the largest oil producers, and of course, we need to cooperate, to exchange information,” he said.
The pair have led an alliance between major oil producers from the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC members, which has agreed for several years to curb its output to balance the market and help push oil prices upwards. The US, a major oil producer, is not part of the alliance.
Sechin noted that several oil producing countries are not part of the deal and do not plan to join it, questioning the purpose of the cuts. “Is there a point to cut further if other producers will increase?” he asked.
“If you give up your market share, you will never return back to there, and here is the point. The price will adjust [sooner or later]. But if you lose your customers, you will never win them back again,” Sechin said.
The OPEC+ meeting in early March came to a bitter end when Russia refused to deepen existing cuts, which expire on 31 March, and Saudi Arabia responded by slashing its own crude prices in an attempt to grow its market share. This oil price war, in the midst of the coronavirus pandemic which has hit oil demand, has caused the price of Brent crude to plummet to below $30 per barrrel.
