The Russian oil price war is an uncommonly open conflict. Eminent analyst Mikhail Krutikhin states that when Putin met with the oil barons in early March, only Sechin spoke calling for war, claiming that Russia was the Great Energy Power.
echo.msk.ru/programs/year2…
echo.msk.ru/programs/year2…
Sechin argued that US shale oil companies would soon go bankrupt; Saudi Arabia had a bigger budget deficit and less reserves than Russia, so Russia would win. As usual, Putin bought Sechin's line, not asking the other oil people what they thought.
Today, Lukoil's very clever no 2, Leonid Fedun, has given a BIG interview to RBC, while he rarely speaks in public. Fedun has been the leader of the private oil company lobby calling for an agreement with OPEC on oil price cuts.
rbc.ru/business/11/04…
rbc.ru/business/11/04…
Diplomatically, Fedun thanks Putin (implicitly for having dropped Sechin) & praises Energy Minister Alexander Novak (the counterweight to Sechin), while he wisely avoids mentioning Sechin (we don't call the devil by name!).
Fedun continues, that Lukoil, Russia's second biggest oil company after Rosneft, would have been forced to cut its output by 50% if the oil price war had not been impeded. Many of the stopped wells would have been wasted forever because of flooding.
In a broader Russian context two big questions arise. Does it indicate that Putin's power is weakened that he slights one of his top favorites after less than a month? Or does it mean that Putin finally has had enough of Sechin's shenanigans?
The global conclusion is clear. Russia (Sechin) overplayed its hand in early March declaring an oil price war against Saudi Arabia and the US & is now creeping to the cross. The private companies defeated state-owned Rosneft. Will it have consequences for Sechin or Putin?
