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Russia's hydrocarbon suppliers to switch to China and India in coming years

November 26, 2013, 15:44 UTC+3 World Service) ¶ 26/11 Tass ¶ MOSCOW

Experts: it will be not easy for Russia to fulfill its obligations, in view of the fact that the country’s oil production will stabilize at best

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MOSCOW, November 26. /ITAR-TASS/. According to the World Energy Outlook (WEO) 2013, China will soon become the largest oil importer, and India - the largest coal importer. These countries will be influencing energy suppliers, believe experts of the International Energy Agency (IEA). Meanwhile, it will be not easy for Russia to fulfill its obligations, in view of the fact that the country’s oil production will stabilize at best, if does not start to decline, the Nezavisimaya Gazeta newspaper writes.

“The energy sector is in a transition period: the importers are becoming exporters, and exporters are becoming major consumption centers. The centre of gravity of global energy demand is moving decisively towards emerging economies, in particular, China, India and the Middle East countries, which increase the global energy demand by one-third,” believes IEA Executive Director Maria van der Hoeven.

The United States by means of shale oil and Brazil (by deepwater fields) will be increasing production until 2020. In the early 2020s, the United States will confidently move towards energy self-sufficiency. At the same time, the Middle East role in the long-term prospect will be growing. All these changes will switch the main commercial flows of energy resources from the Atlantic basin to the Asian region.

Iran, which has been temporarily excluded from the world hydrocarbons trade system, will also play an important role. Judging by the results of the recent negotiations (P5+1 in Geneva), it may well take its market niche.

In the view of chief analyst of the Alpari company Anna Bodrova, Russia will capture its share of the market as it possesses solid proven reserves of oil, natural gas and coal.

Co-director of the Investcafe analytical agency Grigory Birg believes that the growth of energy consumption in the Asia-Pacific countries should positively affect Russian companies.

Head of the analytical department of the National Energy Security Fund Aleksander Pasechnik said that Russia’s risks are first of all in the fulfillment of contract obligations to China. “Maybe it will have to diversify the oil supply route from the west to the east,” the expert noted. “Also, Rosneft has been more and more careful about its own production forecast. In the coming years the company’s production will not be growing, stabilizing at best, whereas the supplies to China are to be sharply increased.” In the view of Pasechnik, Iran’s factor will not be significant. “The OPEC countries are interested in stabilizing comfortable for them prices and will prevent their imbalance,” he believes. “An optimal price will be $100-110 per barrel until 2020,” he is quoted by the Nezavisimaya Gazeta daily.


Itar-Tass is not responsible for the material quoted in these press reviews.

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