MOSCOW, October 13. /TASS/. Long-term energy market stabilization mechanisms are crucial given the tough atmosphere at present, said President Vladimir Putin at Russian Energy Week on Wednesday.
"Once again, Moscow is hosting the heads of leading industry companies and associations, respected experts and area specialists to discuss together the current state of the global energy sector and its future, as well as its most important trends. And, of course, we are also gathering to suggest ways to stabilize the energy market for the long term, which is especially important under the current difficult circumstances," President Putin said.
Fuel crisis during pandemic
President Putin also pointed out that the energy sector has felt the full force of the crisis caused by the COVID-19 pandemic, when "business activity was slowed down due to restrictions, production was suspended, along with the use of transportation, causing demand for energy resources to decline." "At the end of last year, global primary energy consumption declined by 4.7%. This was the most serious shock to the industry over the past 70 years," he noted. The prices also reflected the decline. Compared to 2018, the cost of natural gas in Europe last year dropped 2.5-fold, President Putin said. "In 2020, it was $113 per 1,000 cubic meters. In 2019 it was $159, and in 2018, it was $282," he said.
Unprecedented for the oil sector
An absolutely unprecedented situation took place in the oil segment, the head of state added. "None of us, none of you could even believe it and could not even imagine that it was possible, when last spring the price of oil for the first time in history plunged to a negative value," he said. "Storing oil became more expensive than just paying for it to be taken. That’s just a unique situation." Then, according to Putin, the OPEC+ agreements played a key role in stabilizing the oil market. OPEC member-countries and states that are not part of the cartel managed to establish effective interaction.
"They were able to ensure the stability of the oil industry during the pandemic. And, what is especially important, to create conditions for investment activity, because if investments in new fields and prospective oil production were stopped, the market would have inevitably faced a large-scale, critical deficit in the very near future. As a matter of fact, that is some of what we are witnessing today," he said.