Oil Price to Reach $80 p/b

25 november 2015 | TV Channel "TVC"

Russia is planning to increase the natural gas production by 40% up to 2035, according to the Vladimir Putin’s word the day before the Gas Exporting Countries Forum (GECF). Some experts call the Iran’s Forum a repartition of the gas market. What scenarios may be named in Teheran? Are we on the brink of the gas market repartition? Leonid Grigoriev, the Chief Adviser to the Head of the Analytical Center, commented on these and other question to the anchorman of the TVC’s program ‘Sobitiya. 25 Chas.’

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

‘General outlooks for 2040 – both Russian and international – are mostly about the same shares of energy sources: a quarter of the global demand for gas, coal, a bit more oil, atom, water. Even though gas should dominate due to the climate issue, as before the bright future of diferent renewable sources the main source of energy should be gas. To date, gas is in handcuffs in Europe and some other countries. The meeting is to turn gas back to the normal expansion of consumption. And Mr Putin is optimistic about the global gas consumption outlook, the increasing Russian production and exports, of which to Asia. In general coal is occupying 70% of the Asian energy balance which is an awful fact considering climate issues. It is logical that there should be a move towards gas,’ said Mr Grigoriev.

According to the expert, tight oil unbalanced the market in 2014-2015. ‘Saudi Arabia is selling at $40 p/b even though the budget is designed for $59 p/b. This stands for the fact that they do not want to give away contacts and do force out expensive oil including the American one,’ considers Mr Grigoriev. There is a complex global game going on, notes the expert. ‘Moreover the outlook of the Energy Agency up to 2020 proclaims 80 p/b. When Iran enters the market with its oil it will need to fit into general contacts thus no collapse will happen,’ said the expert.

The expert also talked on the possibility of ceasing ISIS financing, which raises money by supplying with smuggled oil. ‘There is a business in Syria which has been in operation since Saddam Hussein. Iraq was exporting seas of oil (near a million tonnes per year, according to various estimates) to the West, bypassing the UN sanctions. The business was tuned long ago and ISIS just got it astride. They do cheap production and selling through Turkey,’ said the expert. Mr Grigoriev is sure that if our aviation is intense, the real oil movement from Syria to consumers will be stopped.

Futhermore, Mr Grigoriev talked on trends in the oil and gas market. ‘All economists say that the price may reach $80 p/b. The price of $100 appeared due to the Fukushima disaster and the Libyan socio-economic disaster. Today we are experiencing the oil overflow. It will take a year or two to balance the market,’ resumed the expert.

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