On the Price of Russian Oil | Igor Sechin

The EU will no longer set prices for Russia’s flagship Urals oil blend, now that Asia is the largest consumer of western-sanctioned Russian crude, the head of the country’s oil major Rosneft, Igor Sechin, said on Monday.

An EU embargo on seaborne exports of crude accompanied by price caps on oil and petroleum products originating from Russia has triggered a reshuffle in global oil supply. In a matter of months, Moscow rerouted most of its oil flows that used to go to Europe, to Asian markets. The country has ramped up its seaborne oil shipments to China, India and Türkiye at the expense of Western nations.

 

Oil exports to India alone jumped 33 times in December, with Russia now the country’s largest supplier, replacing Iraq. About 70% of Urals cargoes loaded last month went to New Delhi, according to Reuters calculations.

“If Russian oil does not enter the European market, then there is no reference price. Reference prices will be formed where oil volumes actually go,” Sechin pointed out, speaking at the India Energy Week forum.

The Russian government is now discussing how to calculate Russia's taxable oil price following the import ban and price caps set by the EU and G7 countries. Currently, for tax purposes, the average price for Urals on the world market is used, in particular in the ports of Augusta (Italy) and Rotterdam (Netherlands). But due to sanctions, Russian oil is practically not supplied there. Sechin also suggested that “futures contracts, futures settlements” should be abandoned at the first stage in order to regulate market indicators. To stress his point, the head of Russia’s oil giant even quoted from the Bible. “As it is written in Ecclesiastes, "What is crooked cannot be made straight. And what is lacking cannot be counted.”

Meanwhile, Asian buyers have ramped up imports of a wide variety of Russian crude oil, including lesser-known Arctic grades. Two other popular blends, ESPO and Sokol, have been trading above the Western price ceiling of $60 a barrel, at $66 and $71 per barrel respectively, as of Tuesday.

 

Quoted from:

RT.com (Feb 07, 2023) - EU no longer dictates price for Russian oil – Rosneft CEO.

 

See also:

Rosneft.com (Feb 06, 2023) - Rosneft Board of Directors. 

Igor Sechin (2018) - Greater Eurasia: Russia’s New Energy Gamble.

 

Greater Eurasia | Russia’s New Energy Gamble

Bruno Maçães (Apr 2018) - In October 2017, Rosneft Chief Executive Officer Igor Sechin took the unusual step of presenting a geopolitical report on the “Ideals of Eurasian integration” to an audience in Verona, Italy. One of the maps projected on the screen during the presentation (HERE) showed the supercontinent—what Russian circles call “Greater Eurasia”—as divided between three main regions. For Sechin, the crucial division is not between Europe and Asia, but between regions of energy consumption and regions of energy production. The former are organized on the western and eastern edges of the supercontinent: Europe, including Turkey, and the Asia Pacific, including India. 

Between them we find three regions of energy production: Russia and the Arctic, the Caspian, and the Middle East. Interestingly, the map does not break these three regions apart, preferring to draw a delimitation line around all three. They are contiguous, thus forming a single bloc, at least from a purely geographic perspective. 

Sechin’s map has a number of other interesting elements. As noted already, Turkey is left on the European side of the line delimiting the energy production core in the west. The same is true for Ukraine, which although unavoidable in this context is still an unusual inclusion in a map sanctioned by the highest echelons of Russian state power. If one looks at the world through the prism of energy geopolitics, then Ukraine is a European country—a consumer, not a producer. 

[...] The map illustrates an important point about Russia’s new self-image. From the point of view of energy geopolitics, Europe and the Asia Pacific are perfectly equivalent, providing alternative sources of demand for energy resources. Russia has been struggling to abandon its traditional orientation toward Europe, hoping to benefit from the flexibility of being able to look both east and west to promote its interests. It seems that Sechin and Rosneft can place themselves in that position much more effortlessly. 

Sechin’s map subtly makes one final—and decisive—point. As you consider the three areas it delimits, it becomes apparent that two of them are already led and organized by a leading actor: Germany in the case of Europe and China for the Asia Pacific. Production chains within these highly industrial regions are increasingly managed by German or Chinese companies, which tend to reserve the higher value segments for themselves. Their spheres of influence extend to all important inputs, with one glaring exception: energy. In order to address this vulnerability, the two regions of energy consumption will be attracted to the core region, where they need to ensure ready and secure access to energy resources. And their efforts may well be made easier by the fact that the core region of energy production lacks a hegemon capable of ensuring its survival as an autonomous unit in the Eurasian system.

The very same day he delivered his speech on Eurasian geopolitics, Sechin announced that Rosneft would take control of Iraqi Kurdistan’s main oil pipeline, boosting its investment in the autonomous region to $3.5 billion, despite Baghdad’s military action sparked by a Kurdish vote for independence. The move helped shield Kurdistan from increasing pressure from Baghdad. Two weeks later, Sechin went on to sign a preliminary pact with the National Iranian Oil Company, the first step before a binding deal to participate in Iran’s oil and gas projects over the next few years, with investments totaling up to $30 billion and a production plateau of 55 million tons of oil per year.

Four Russian oil companies have even begun negotiating for opportunities in Syria, a venture driven as much by politics as by commercial interest. The aim is not to explore and extract Syria’s modest petroleum reserves, of course. By actively participating in rebuilding and operating Syrian oil and gas infrastructure, Russian energy companies will be in control of a critical transit route for Iranian and Qatari oil and gas heading to Europe, bringing two rival producers closer to its orbit and tightening its stranglehold on the European gas supply. In 2009, Qatar proposed to run a natural gas pipeline through Syria and Turkey to Europe. Instead, Al-Assad forged a pact with Iran to build a pipeline from the Persian Gulf and then through Iraq and Syria and under the Mediterranean. This project had to be postponed because of the war. When it is resumed, Russia will be in control.

It is in the very nature of the Eurasian system described by Sechin that the core energy production region—provided it is sufficiently united and organized—will benefit from its central position, being able to pick and choose between east and west in order to obtain the most favorable terms. Russia and the Middle East are now part of the same geopolitical unit. It took the Russian military intervention in Syria for the world to start to come to terms with this reality.

One Belt, One Road | Eurasian Century Unstoppable

There has never been a period in which China’s diplomats were more active on the global stage.
Under President Xi, the Chinese leadership has substantially stepped up its foreign policy
ambitions, heavily expanding the scope of its activities in the region and its global reach.
By altering long-standing traditions of relative restraint and adjusting key foreign policy
priorities, Beijing is engineering a new course in global affairs. Enlarge map.

Moritz Rudolf (Oct 04, 2016) - In autumn 2013, Chairman of the CCP and President of the PRC, Xi Jinping, announced the “One Belt, One Road (OBOR)” initiative. This core element of a more pro-active Chinese foreign policy comprises of the land-based “Silk Road Economic Belt”, and the “Maritime Silk Road of the 21st Century”. The OBOR initiative by far exceeds the development of linear connections between Europe and Asia. In fact, Beijing strives to establish a comprehensive Eurasian infrastructure network. Trans-regional corridors are to link the land and sea routes. As the primary investor and architect of the Eurasian infrastructure networks, Beijing is creating new China-centred pipeline, railway and transport networks. In addition to this the Chinese leadership is focused on the expansion of deep-sea ports, particularly those in the Indian Ocean.

With the OBOR the Chinese leadership is primarily pursuing three main goals: (1) Economic diversification; (2) Political stability and (3) the Development of a multi-polar global order. From an economic perspective, China strives that the development of new trade routes, markets and energy sources will result in growth impulses and at the same time reduce dependencies. Projects linked to the OBOR are to once again fill the order books of Chinese SOEs which are presently suffering from over-capacities. Furthermore, with the expansion of the Eurasian transport infrastructure Beijing aims to lay the foundations for China-centered production networks, for instance with Chinese companies relocating production to South-East Asia. Politically speaking, the Chinese leadership hopes that the OBOR initiative stabilizes Beijing’s western Provinces, as well as the neighboring trouble spots, like Pakistan or Afghanistan. As China finances most infrastructure projects Beijing is also able to increase its political influence. Many countries along the Silk Roads depend on Chinese infrastructure investments.

The overarching goal is to be an active part in the establishment of a multi-polar world-order. China seeks to play a constructive role in the reform the international system. The OBOR-Initiative is intended to be the foundation of a new type of international relations. The Chinese leadership speaks of the establishment of a “community of common destiny”. Core elements are more connectivity in Eurasia, “win-win-cooperation”, “mutual progress and prosperity” as well as upholding the UN principle of non-interference in the internal affairs of other states. So far, the OBOR-initiative has not been embedded in an overarching international framework and primarily is a concept, a meta-strategy. It is still unclear whether the initiative will be realized through a bilateral or multilateral process. The Chinese leadership speaks of an inclusive process, which means, that all involved parties are invited to shape and promote the “Silk Road Economic Belt” and the “Maritime Silk Road of the 21st Century” in line with their own economic interests. First steps of institutionalization are already emerging. The recently established AIIB and the Silk Road Fund serve to finance the projects. In May, China and Russia agreed to link the Silk Road Initiative with the Russian Far East Development Program for Siberia. In addition to this Moscow and Beijing agreed to link the Eurasian Economic Union with OBOR. Moreover, in June Hungary and China signed a Memorandum of Understanding to jointly promote the Silk Road Initiative.

A brilliant plan: Xi Jinping’s ambitious strategic initiative – an adaptation of the historical
Silk Road – could sow the seeds for a new geopolitical era. Enlarge map.

While central banks continue to "print" liquidity, now at a pace of nearly $200 billion per month, they are
unable to print trade, perhaps the single best indicator of deteriorating global economic conditions. The
latest confirmation comes from China: In 2015 China’s import growth slowed starkly, driven by both
external and domestic factors, including a rebalancing of demand. Econometric results point to weak investment
and rebalancing as the main causes of the import slowdown. Spillover effects from China’s rebalancing are
estimated for some 60  countries using value-added trade data, and are found to be more negative on Asia and
commodity exporters than others (HERE).

William Engdahl (Oct 11, 2016) - The totality of the strategy behind Xi Jinping’s Eurasian One belt, One Road rail, sea and pipeline initiative (OBOR), which is moving quietly and impressively forward, is transforming the world geopolitical map. In 1904 a British geographer, Sir Halford Mackinder, a fervid champion of the British Empire, unveiled a brilliant concept in a speech to the London Royal Geographical Society titled “The Geographical Pivot of History”. That essay has shaped both British and American global strategy of hegemony and domination to the present. It was complemented by US Admiral Alfred Thayer Mahan’s 1890 work, “The Influence of Sea Power Upon History”, which advocated “sea power,” stating that nations with domination of the seas, as the British Empire or later the USA, would dominate the world.

The One Belt, One Road, by linking all the contiguous land areas of Eurasia to the related network of strategic new or enlarged deep-water ports of OBOR’s Maritime Silk Road, has rendered US geopolitical strategy a devastating blow at a time the hegemony of America is failing as never in its short history. The Eurasian Century today is inevitable and unstoppable. Built on different principles of cooperation rather than domination, it just might offer a model for the bankrupt United States and the soon-bankrupt European Union, to build up true prosperity not based on looting and debt slavery.

The Asian Infrastructure Investment Bank (AIIB) has 57 member states (all "Founding Members") and was
proposed as an initiative by the government of China. The bank started operation on 25 December 2015;
the capital of the bank is $100 billion, equivalent to  2⁄3 of the capital of the Asian Development
Bank and about half that of the World Bank (HERE).

The United States is the number one trading partner for 56 countries, with important relationships
throughout North America, South America, and Western Europe. Meanwhile, China is the top partner
for 124 countries, dominating trade in Asia, Eastern Europe, Africa, and Australia (HERE).

March 18, 2014 | A Pivot of History & the Ascent of a Multi-Polar World System

March 18, 2014 – Address of Russian President Vladimir Putin to State Duma deputies, Federation Council members, heads of Russian regions, Representatives of the Republic of Crimea and Sevastopol, civil society representatives in the Kremlin, and to “The West”:

After the dissolution of bipolarity on the planet, we no longer have stability. Key international institutions are not getting any stronger; on the contrary, in many cases, they are sadly degrading. Our western partners, led by the United States of America, prefer not to be guided by international law in their practical policies, but by the rule of the gun. They have come to believe in their exclusivity and exceptionalism, that they can decide the destinies of the world, that only they can ever be right. They act as they please: here and there, they use force against sovereign states, building coalitions based on the principle “If you are not with us, you are against us.” To make this aggression look legitimate, they force the necessary resolutions from international organisations, and if for some reason this does not work, they simply ignore the UN Security Council and the UN overall.

Vladimir Putin: Against the equality of good and evil.

 

[…] I understand those who came out on Maidan with peaceful slogans against corruption, inefficient state management and poverty […] However, those who stood behind the latest events in Ukraine […] resorted to terror, murder and riots. Nationalists, neo-Nazis, Russophobes and anti-Semites executed this coup […] We understand what is happening; we understand that these actions were aimed against Ukraine and Russia and against Eurasian integration […] We have every reason to assume that the infamous policy of containment, led in the 18th, 19th and 20th centuries, continues today. They are constantly trying to sweep us into a corner because we have an independent position, because we maintain it and because we call things like they are and do not engage in hypocrisy. But there is a limit to everything. And with Ukraine, our western partners have crossed the line.

[…] It is at historic turning points such as these that a nation demonstrates its maturity and strength of spirit. The Russian people showed this maturity and strength through their united support for their compatriots. Russia’s foreign policy position on this matter drew its firmness from the will of millions of our people, our national unity and the support of our country’s main political and public forces […] Obviously, we will encounter external opposition, but this is a decision that we need to make for ourselves. Are we ready to consistently defend our national interests, or will we forever give in, retreat to who knows where? […] Russia will also have to make a difficult decision now, taking into account the various domestic and external considerations. What do people here in Russia think? Here, like in any democratic country, people have different points of view, but I want to make the point that the absolute majority of our people clearly do support what is happening.

In his 2013 annual Presidential address to the Federal Assembly, Vladimir Putin clearly expressed:

[…] Today, many nations are revising their moral values and ethical norms, eroding ethnic traditions and differences between peoples and cultures. Society is now required not only to recognise everyone’s right to the freedom of consciousness, political views and privacy, but also to accept without question the equality of good and evil, strange as it seems, concepts that are opposite in meaning. This destruction of traditional values from above not only leads to negative consequences for society, but is also essentially anti-democratic, since it is carried out on the basis of abstract, speculative ideas, contrary to the will of the majority, which does not accept the changes occurring or the proposed revision of values. We know that there are more and more people in the world who support our position on defending traditional values that have made up the spiritual and moral foundation of civilisation in every nation for thousands of years: the values of traditional families, real human life, including religious life, not just material existence but also spirituality, the values of humanism and global diversity. Of course, this is a conservative position. But speaking in the words of Nikolai Berdyaev, the point of conservatism is not that it prevents movement forward and upward, but that it prevents movement backward and downward, into chaotic darkness and a return to a primitive state.

The President of Russia is leading the global resistance against the Empire of Wall Street and the City of London. He stopped their genocidal depredation in Russia. This is why they hate him, why they attempt to kill him, and why the corporate media cheers thugs like Yulia Tymoshenko and Mikhail Khodorkovsky as if they were heroes of democracy. 

 

For 250 years, the imperial West has waged wars, destroying nation after nation, producing failed states, terrorism, chaos, and millions of casualties. This was the second NATO coup in Ukraine within a decade. The road to Moscow leads through Kyiv. But this time, Vladimir Putin’s Russia was prepared and not alone: After the latest coup in Ukraine, Crimea hastily joined Russia on March 18, 2014, before becoming subject to IMF looting or another ‘civil war’ orchestrated by NATO. 

 

The unification of Crimea and Russia is backed by the Shanghai Cooperation Organization (SCO). This military and economic alliance was founded in 1996 in response to the globalizing savagery of NATO. Today, the SCO comprises six member states, five observer states, three dialogue partners, and three guest attendees from five non-Western civilizations (Russian, Chinese, Muslim, Hindu, and Buddhist—four of which are nuclear powers) from the South China Sea to the Baltic Sea and from the Persian Gulf to the Bay of Bengal. In terms of potential, production, infrastructure, economic growth, and prosperity, this is the most successful and promising alliance in recorded history. 

 

This is not an empire; it is an alliance of sovereign states, and their relations are governed by international law. This is the very opposite of the poisonous 'one-world' gospel of the globalists and the 'clash-of-civilizations' ideology of the liberals.

Pro-Russian protesters with banner reading “Odessa for referendum!”
in the center of Odessa, March 23, 2014.

 

China knows very well that it is next in NATO’s line for 'freedom' and 'democracy,' and that without the SCO and Russia’s energy supply, it would fall prey to the Empire. Therefore, China supports Russia, Syria, Iran, Sudan, Pakistan, Afghanistan, and a new multipolar world system. 

 

The fascist regime in Kyiv has no legitimacy at all and won’t last. The EU has no means to sanction Russia. The EU is not a superpower; it is not the White Knight and won't rescue anybody. The EU is merely a deeply corrupted, pitiful, and bankrupt US protectorate on the brink of collapse and revolution itself. However, in this latest freedom-and-democracy scam, the EU is once again the colonial aid of the international banking cartel. And once again, they came to loot: Ukraine's gold was flown out to London and New York two weeks ago. 

 

Last week, the EU showed up in Kyiv offering a multi-billion Euro credit conjured by Mr. Draghi out of nothing to support Ukraine. Nobody takes this seriously. The Ukrainians will overthrow Euro-fascism and join the Eurasian Customs Union or split the country. Any sanctions will only strengthen Eurasian integration and increase unemployment and misery in the EU.

The US will continue to play India as the continental dagger against China and Pakistan until an Indian Putin emerges and integrates the country into the SCO. Venezuela has been fighting imperialism since 1998. Without nuclear defense capabilities and strong allies in the region, the people of Venezuela may soon perish and see their oil, gas, and gold stolen once again, degrading them into poverty. 

 

However, with more than 60% of the world’s population, the momentum toward a new international system and future world trade and economy is intimately related to the SCO and the BRICS. All of them are building up gold reserves and are about to create an independent currency, a BRICS bank, and a BRICS currency reserve pool. The SCO and the BRICS could already destabilize the Euro and the US dollar by dumping them into the exchange markets. The FED and the ECB would not be able to arrange currency swaps with other countries large enough to buy up the dumped currency, causing exchange values to fall. Such an action could be a response to more hostile NATO activities.

If this is indeed the “beginning of the end” for the globalist Empire, it is still only the very beginning of a long and dangerous process: The next big NATO war will be the endgame for the absolute rule of a cynical world hegemon over 99% of the global population. Some empires die peacefully, destroyed by economic ruin, overstretch, and social implosion; others prefer to perish in an orgy of violence.