"Trends give us optimism": LUKOIL CEO Vagit Alekperov on the situation on the oil market and prices for energy raw materials

- Vagit Yusufovich, we would like to discuss with you the situation on the world oil market.

How do you assess the current state of affairs in the industry?

Is it likely that global demand for energy resources will return to pre-crisis levels?

- Today's trends inspire us with optimism.

The consumption of our products is growing.

In Europe, gasoline sales have almost reached the 2019 level.

Consumption of both gasoline and jet fuel is increasing in the United States.

These are the factors that indicate that demand is returning to the level of the pre-pandemic period.

We hope this trend continues.

Now there is an active vaccination of the population in all developed countries - the main consumers of our products.

Therefore, we are full of optimism, and oil prices today demonstrate that the demand for crude oil in the world is growing.

- Taking into account the emergence and active use of vaccines in the world, as well as a certain stability of the situation with the pandemic, did the business feel some relief?

- We are still tense due to the fact that production restrictions under the OPEC + agreement are still in effect.

As you know, the decision to further increase oil production from June 1 was never made.

Production growth should begin only on July 1.

• Alekperov on agreements on the OPEC + deal

There is now an overhang of undistributed oil on the market due to suspended production.

As part of the agreements, for example, today we are limiting production by 140 thousand barrels per day at our own operating wells.

Therefore, until this volume is distributed in the global market, of course, we will not have stability in the medium term.

In these conditions, despite the current price level above $ 70 per barrel, we are making our plans in the medium term, proceeding from the oil price at $ 50 per barrel.

- You mentioned the OPEC + deal.

The agreements have been in effect since 2016 and have been repeatedly extended by the participating countries.

In your opinion, shouldn't the agreement be made indefinite?

- We are interested in keeping this agreement.

It allows you to regulate the volume of oil production, relatively speaking, from zero to infinity.

That is, the predictability of the energy market today gives confidence that prices will remain affordable both for our consumers, that is, there will not be a rise in prices up to $ 140 per barrel again, and for producers who can safely make their economic calculations for the medium term.

- Do you think it is worth expecting a return of oil prices to $ 100 per barrel in some foreseeable future?

- If we do not invest in our industry, as has been happening for the last four years, then, of course, prices may return to $ 140 per barrel.

This is why the OPEC + agreement must act to protect our consumers.

• Alekperov on a possible rise in oil prices

- Based on the current realities, do you have an understanding of what new approaches in the field of energy need to be developed at the moment?

What areas should be paramount?

- The main direction today is a combination of traditional energy sources and non-traditional ones.

There should be no so-called revolutionary processes - that is, you cannot give up one type of product in favor of another.

In other words, the process should be evolutionary depending on the continent or country.

Therefore, we are in favor of a sensible approach.

It is necessary for alternative energy to develop and at the same time complement the traditional one, thereby balancing the market if suddenly there is a shortage of hydrocarbon fuel.

- At the St. Petersburg International Economic Forum, you attended the plenary session with the participation of Vladimir Putin.

What new and important ideas did you hear during the speech of the head of state?

- The President has once again declared the stability of taxation, which should be an impetus for companies and entrepreneurs.

This thesis was again voiced from his lips.

I hope that the Ministry of Finance will hear this message from the president, and stable taxation will contribute to the development of business in Russia.