Volatility in oil and gas markets and greater international cooperation to stabilize prices dominated the first day of talks Oct. 13 at Russia’s energy forum in Moscow, which OPEC, non-OPEC ministers and Western partners attended, among others.
S&P Global Platts has assessed Dated Brent at three-year highs in recent days, with the benchmark reaching as high as $84.43/b Oct. 11.
At the same time, European spot gas prices have been on the rise over the past month amid supply concerns, with the day-ahead TTF price reaching record high Eur116.10/MWh ($39.5/MMBtu) Oct. 5, according to S&P Global Platts price assessments.
Speaking for over two hours at the event’s main session, Russian President Vladimir Putin reassured that Russia was ready to increase the European gas supply if requested and that high commodity prices weren’t beneficial for consumers or producers.
Russian gas supplies to global markets could hit a record in 2021, he said, while oil production wasn’t restrained greater than required under the OPEC+ agreement.
“Russia is ready for constructive, trusting, close cooperation, including for a direct dialogue with our partners in Europe, with the European Commission, to find common solutions to stabilize energy markets and fight climate change,” Putin said.
$100 oil ‘quite possible’
While oil minister Ihsan Ismaael of Iraq, Russia’s OPEC+ colleague, remained certain that oil prices will stabilize around $85/b, Russian and foreign officials were more skeptical, with Putin going as far as suggesting $100/b was “quite possible.”
“Prices could be at this level if the market conditions occur,” Russian deputy prime minister Alexander Novak told reporters after being asked to clarify Putin’s remarks, as quoted by Prime news agency. “We hope that the situation will be balanced.”
Use of long-term contracts urged
At the same time, Western CEOs present at the forum, including those from BP, ExxonMobil and TotalEnergies, urged the use of long-term contracts to support market stability and stabilize gas prices, and to stabilize supply and demand to lower oil prices.
“With the pandemic and low prices, a lot less investment has gone in to replacing depleting supplies,” ExxonMobil CEO Darren Woods said. “As we’ve seen historically, prices will rise to incentivize additional supplies, until supply and demand meet.”
“If we don’t balance the demand equation and only address supply, we’ll have additional volatility.”
During the first day of the forum, Russia’s energy minister, Nikolay Shulginov, discussed increasing cooperation during bilateral meetings with ministers from Brazil, Iraq and Sudan.
On Oct. 14, the forum will welcome Russia’s OPEC+ allies such as Saudi energy minister Prince Abdulaziz bin Salman, UAE’s Suhail al-Mazrouei, Azerbaijan’s Parviz Shahbazov, as well as OPEC Secretary General Mohammad Barkindo to talk about the future of hydrocarbons on the road of producers reaching net-zero.
Source: Platts