Well, as Russian President’s press secretary Dmitry Peskov told reporters yesterday, there are no talks with Riyadh on oil markets in the Kremlin’s plans. And this despite the fact that, according to all the same Peskov, the relations between the two countries are "at a fairly high level", there are no problems in interstate and business communication, as well as mutual misunderstanding: and it’s not that there was no negotiation, they simply don’t see the need for the Kremlin to take the initiative in these matters. And just don’t have to scream in a panic: “How is it - they don’t see the need ?!” and “Look at oil prices!”
Everything is quite simple here.
First, let's all calm down a bit for a start and stop linking directly, yes, very serious, but quite “exchange” volatility with the practical implementation of contracts for the supply of physical raw materials. The fact is that (it is strange that this should be reminded, for example, of the professional journalistic community), when we talk about world oil prices on exchanges, we are talking about prices for futures with a limited delivery time, and they, these open contracts, now, during the crisis, so much has been discovered that (this is quite official information) the amount of “paper oil” exceeds the availability of oil, which physically exists elsewhere, literally by orders of magnitude.
As a matter of fact, these “paper” futures are now traded on exchanges. And thanks to this, by the way, some especially malicious and unkind exchange analysts, who are calculating long options with the crisis of the real oil sector superimposed on the exchange crisis, are now expecting bloody meat with a malicious vengeful pleasure. When at least partial fix occurs and the futures contracts still have to be executed in reality, then even with overloaded vaults, a barrel can easily fly off for the predicted “$ 60 by the end of the year”.
Once again, this - almost guaranteed - will happen even with really crowded storages: modern stock speculation is a rather ironic thing, albeit seriously taken off the ground.
If someone won, then someone must lose.
Miracles, in general, do not happen.
So, despite all the understanding of the complexity of the current situation, the calm of both the Kremlin and most of the largest oil companies in Russia (and here, Rosneft and Gazprom Neft, for example, act in a touching unanimous regime), it is also quite understandable. Such structures, if they respect themselves and value their money, forecast the market only for a long time. This is simply their nature: a relatively long investment, as in any other real sector. And what happens there in the current cockroach races, they observe something like you and me: rather, with the inquisitive interest of a natural scientist - nothing more. Well, in the worst case, checking how much should be necessary to normalize the situation of the airbag. And with her in Russia everything is still in order - even taking into account the coronavirus should be enough for a long time.
Secondly, let's still see what really happened with OPEC +.
And here, too, in principle, everything is more or less clear. Only a person who is sufficiently virgin by nature can believe that the OPEC + deal is a deal of the “Big Two” - Russia and Saudi Arabia.
From the very beginning it was clear that in the current, even just a political situation, it was purely theoretically impossible without the participation of the United States, which at least should have approved it. Can you imagine that Riyadh went to negotiate with Moscow without Washington?
So we, too, in general, can not, despite all the professional imagination of professionally writing people.
And, accordingly, we don’t really imagine if the United States told the Arabs that it would be good to reduce production a bit, because there are problems in the oil shale industry: oil already went below $ 50 a barrel at that time, and the re-loaned industry didn’t like death. To make it clear (just as an illustration): yesterday, at the same time as Peskov’s comment about the Kremlin’s unwillingness to initiate new negotiations with the Saudis, the first major shale oil company, the Whiting Petroleum, went bankrupt. Sorry, not a month has passed. Or the Saudis themselves initiated the potential reduction - there is no particular difference here.
The fact that the oil market to keep the price per barrel in the corridor that suits all major players (approximately $ 60-70) will be regulated, including due to a global reduction in production, no one doubts.
The only question is, will it shrink due to whose expense, excuse me?
So, actually, as far as I understand, big trade is going on around this right now. It is no coincidence that in the midst of the coronavirus, the American president called his Russian counterpart primarily on the oil issue. It’s just not a joke: the sharply growing American oil industry is already at 5.6% of US GDP, not counting a variety of “allied” and “investors”, including pension funds. For Trump, before the election, bring down this working piece of the real sector - the most, in general, then. And, possibly, a leak in a number of American media that Russia (“noble” - this is specially noted) agreed at least not to increase (but not to reduce) production, and there is the result of this conversation, “long and productive”.
And if this is true, then the position of our country looks quite logical: we, as before, are ready to abide by the previous OPEC + agreements and to roll over for some time. But if it will be necessary to shrink further and further, already sort it out somehow among themselves.
Actually, for Trump in this situation, far from the worst result.
Somehow, he’s sure that he’s called Arabs, he’ll “squeeze” the Arabs.
But as for the price of oil, the leading oil companies of our country (we already remembered Rosneft, you can also recall its head of Gazprom Neft Dyukov, who supported it) - and this is already obvious - they don’t abandon their own, which are quite expensive the market of words to the wind when they confidently predict the return of the oil price to the previous corridor of $ 60 +. This is just logical. If this does not happen, then the American shale industry and the budget of the Kingdom of Saudi Arabia will collapse. This is, in general, twice two.
And the two largest players in the person of the United States and Saudi Arabia, and even with no opposition from the Russian Federation, must resolve this absolutely priority issue for them in any case. Otherwise, a penny to them, sorry, the price.
Well, why should they interfere in this process?
Let them decide.
If only not at our expense.
Here the most important thing for us is what is called not to show initiative by ourselves. Engaged in pre-scheduled affairs - the same additional exploration of new areas, Taimyr, for example - and not paying attention to small (from the point of view of these scales) exchange affairs. In the end, no matter what the new marvelous world after the crisis may become, it will still need Russian energy carriers - oil, gas, coal, nuclear fuel rods at stations built using our technologies. And within the Russian economy, these structure-forming sectors, we do not even doubt, will be able to stand up for themselves. So here you don’t have to worry much, providing our overseas oil partners with the opportunity to solve their (much more urgent than ours) problems. Predicted by our "oil generals", the minimum price necessary for their shales in the corridor is $ 50-60 (for us, by the way, it’s also quite pleasant), they will decide, believe me, without us some time after they overcome the tantrum of their Arab friends.
At present, however, we ourselves have (and without any oil and viral crises) economic tasks, including, so to speak, “more dubious” ones. And the coronacrisis here for us is also a great economic crash test, showing with great accuracy our pain points and other weaknesses.
The author’s point of view may not coincide with the position of the publisher.