Russia’s Oil War Has a Political Objective, Says Analyst

Russia provoked a bruising confrontation with Saudi Arabia last week, when Moscow refused to join an oil-production cutback as the coronavirus saps demand. The Saudis now plan to boost production and take market share to pressure Russia. Why did the Russians pick this fight? In Riyadh, RBC Capital Markets analyst Helima Croft hears blame being laid on Igor Sechin, the chief executive of Russia’s Rosneft Oil (ticker: ROSN.UK). By triggering a price war in which Russia and the Saudis will flood the world with cheap crude, Sechin hopes to damage the shale-oil producers that have made the U.S. energy independent, Croft has been told. Sechin has another beef with America, says the RBC analyst. In February, the U.S. levied broad sanctions against Rosneft Trading—a subsidiary of Sechin’s company—for helping keep afloat the government of Venezuelan President Nicolás Maduro. Like Vladimir Putin, Sechin came out of Russia’s intelligence services and RBC sees the oil war as a way to retaliate against American sanctions. “Undercutting American energy dominance,” she writes of Sechin, in a Monday note, “most likely appeals not only to his bottom line but also to his ideological affinities.”...MORE