We need to learn how to live in the context of low oil prices and end our oil curse

3 april 2017

In his interview to the Neftegazovaya Vertikal magazine, Chief Adviser to the Head of the Analytical Centre Leonid Grigoriev spoke about the short and midterm prospects in the energy market.

Leonid Grigoryev
Leonid Grigoryev
Chief Adviser to Head of the Analytical Center

Mr. Grigoriev claims that there is every reason to believe in the effectiveness of the OPEC agreement on cutting oil production, which was upheld by a number of non-member countries. Respecting the agreed arrangements is something everybody will benefit from. Also, the future build-up of shale oil extraction in the US will, most likely, develop at a restricted pace and will not have a substantial effect on the market. The impact of another important factor - the implementation of energy-efficient technologies and renewable energy sources – will also take some time to be felt.

The resulting stable growth in oil demand will in the long run also result in oil quotes rising up to $100 a barrel. The expert is, however, convinced that: “Still, Russia would be ill-advised to take these developments for granted. We need to learn how to live in the context of low prices and gradually end our ‘oil and gas curse’”.

Mr. Grigoriev also noted that by 2040 minerals will account for some three quarters of the global energy balance, with oil, coal and gas each making up about one quarter of that balance.

As for the demand for electric cars, the expert believes that it is indeed growing, and not only in Europe, but also in China. “For all that, the advocates of clean transport seem to forget that electricity it requires also needs to be produced some way or other”, Mr. Grigoriev said.

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