Oil giant, Rosneft’s CEO, Igor Sechin, stressed that Asian countries, Russia’s trading partners, will account for the highest growth in oil demand with India, accounting for the highest growth rate, by the middle of the century.
In his keynote speech at the 27th St Petersburg International Economic Forum (SPIEF), Sechin emphasised that over the next five years, India is projected to continue its strong economic momentum, and become one of the top three largest economies in the world, with a GDP of $5 trillion, and by 2050, will overtake the US, in terms of the size of the economy.
He added that India’s end-use energy consumption is set to grow by 90 per cent by 2050, - one of the fastest growth rates in the world, Rosneft said.
India’s economy has made significant strides in recent years. Since 2010, energy demand has grown by 45 per cent, making the country, the third largest energy consumer in the world, he pointed out.
Recently, Rosneft signed a term contract with Indian Oil Corporation (IoCL), to increase oil supplies, and diversify India’s oil grades.
The Agreement took place during Igor Sechin’s, recent visit to India. Indian companies ONGC Videsh, Oil India, Indian Oil Corporation, and Bharat Petroresources, have been owners of 49.9 per cent of Rosneft’s subsidiary, JSC Vankorneft, since 2016.
Rosneft’s CEO projected that developing countries will be the main drivers of oil consumption in the coming decades. By 2030, demand growth in this group of countries is expected to account for 95 per cent of global consumption growth in aggregate. The highest growth in oil demand is expected in Asian countries, which are Russia’s main trading partners.
Little impact of production cuts
Sechin said that OPEC+ agreement, seems to have little impact on the oil market, as observed by the stockpiling of reserves by both Western, and Middle Eastern companies, potentially anticipating significant market changes.
These “phantom barrels”, could offset the effects of voluntary production cuts by major OPEC members, evidenced by market quotations declining, after recent ministerial decisions, he added.
Moreover, the looming uncertainty surrounding the upcoming US presidential elections, where public sentiment is influenced, among other things, by fluctuations in gasoline prices, implies a heightened level of market volatility. The possibility of regulatory changes within the industry, contingent upon election outcomes, underscores emerging risks, prompting major players to explore alternative strategies.
Energy transition
Sechin criticised the prioritisation of anthropogenic factors in climate change discourse, and argued against the effectiveness of energy transition initiatives in addressing environmental concerns. Despite considering hydrogen as a promising clean fuel, he pointed out the current limitations in production technology, logistics, and market readiness.
Highlighting that even as renewable energy accounts for less than 5 per cent of global energy production, and EVs only make up around 3 per cent, the consumption of oil, gas, and coal has continued to rise.
Lack of profitability in green energy initiatives is leading to divestment from the traditional energy sector, exacerbating the challenge of transitioning to sustainable energy sources, Sechin argued.
To achieve energy security, he stressed that it is necessary, to ensure sufficiency, affordability, and reliability of energy sources.
Aggressive promotion of the “green agenda”, actually means declaring an energy war on the majority of the world’s population, and overcoming energy inequality is impossible without reliable supplies of oil and gas.