Russia and Saudi Arabia need to maintain contact, Igor Sechin, chief executive with Russia’s top oil producer Rosneft, was quoted as saying by RIA news agency on Friday.
“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,” Sechin said, according to RIA.
He added that Rosneft was prepared for a dramatic fall in oil prices which followed a collapse of an existing oil output cut deal between OPEC and non-OPEC nations, saying that global oil prices could return to $60 per barrel by end-2020 if shale oil is forced out of the market.
Sechin, who had previously publicly opposed the three-year-long deal to coordinate global oil production, said that OPEC+ – as the current cooperation is known – has lost its power since other factors currently are affecting the price of oil.
Sechin said there are a number of oil producing countries in the world which never were part of the deal and do not want to join it now either. “Is there a point to cut further if other producers will increase?”, he said.
The existing deal will end on March 31, after Moscow and Riyadh failed to reach an agreement in Vienna this month on global oil production. Russia proposed to extend cuts to see the coronavirus impact on the oil demand while OPEC, led by Saudi Arabia, wanted to deepen the cuts.
Brent crude prices fell $1.49, or 5.2%, to settle at $26.98 a barrel on Friday, far below the $46 barrels per day on March 6 when the deal collapsed.
With no oil cooperation deal, Saudi Arabia and Russia, the world’s two top oil exporters, have fallen into an oil price war, something Sechin said was unavoidable as Moscow needs to keep its share and prevent non-members from benefiting from the cuts.
“If you give up your (oil) 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, according to RIA.