Rosneft chief rejects case for oil output cuts

The most powerful figure in Russia's oil industry yesterday signalled his steadfast opposition to combining with Opec to reverse the crude price rout through co-ordinated cuts in production.

Igor Sechin, a close ally of President Vladimir Putin and head of Rosneft, the state-controlled oil company, told an energy conference in London that the world's top producers would not give ground as they fight to hold on to customers.

"Who are we supposed to be talking to about cuts?" Mr Sechin said when asked if he was considering working with Opec, the producing countries' cartel, to try and shore up the oil price. "Will Saudi Arabia or Iran cut production?"

His comments at London’s International Petroleum Week were his first since some of Rosneft’s Russian rivals last month indicated a willingness to consider cutting production with Opec, when Brent crude fell to a 12-year low below $30 a barrel. His statement suggests his long-held opposition to output cuts has not been shaken by the worst price rout in a generation, even as Russia’s economy shrinks.

While Mr Sechin said a co-ordinated 1 million barrel a day cut in output would help prices recover, he gave no indication he thought Moscow should back such a move or join a Venezuelan-led push for action by crude producing countries. Instead, he used a speech to criticise Middle East producers and the US shale industry, saying they had flooded the market with oil – a move he later suggested may have been politically motivated.

“They have deliberately created this situation and they are committed to low prices.” – Copyright The Financial Times Limited 2016