Russia’s Top Oil Man Throws Shade at ‘Fragile’ Saudi Arabia

(Bloomberg) -- It’s time for Saudi Arabia to join the ranks of the rest of the world’s “fragile” oil producers after attacks on its energy facilities exposed the kingdom’s vulnerability to supply interruptions, according to Russia’s top oil executive.

This may seem like a diplomatic faux-pas between the two allies at the heart of the OPEC+ alliance, but Rosneft PJSC Chief Executive Officer Igor Sechin has traditionally been an unapologetic opponent of closer cooperation with Saudi Arabia and the Organization of Petroleum Exporting Countries. In 2016, weeks before the original OPEC+ output-cuts deal was agreed, he said Russia was capable of boosting its crude production. This June, as the two nations worked to extend the deal, Sechin warned it would benefit Saudi Arabia but not Russia.

“As a result of the attacks on Saudi Arabia’s oil infrastructure, at least half of the nation’s production was temporarily blocked,” Sechin said at the Eurasian Economic Forum in Verona. “Not only the traditional five countries -- Iran, Venezuela, Libya, Iraq, Nigeria -- but also Saudi Arabia now can be considered a fragile supplier.”

Sechin’s Verona speech comes just a week after Putin visited Saudi Arabia, for the first time since 2007, to strengthen economic and political ties with the kingdom.

During President Vladimir Putin’s visit, energy ministers from the two countries signed a long-term cooperation charter, and state-run Saudi Arabian Oil Co. opened the doors to Russian reporters to showcase the recovery in production and processing capacity at the Abqaiq and Khurais sites, which were attacked in September. Energy Minister Alexander Novak said at the time that Russia and Saudi Arabia hold a shared view on the global oil market.

Earlier this year, Russia grappled with its own crude-supply incident as the Druzhba contamination crisis forced it to make sharp output cuts. The disruption, which started with minor warnings about high levels of organic chlorides in Russian crude, soon became the biggest disruption to the country’s oil flows in decades.

To contact the reporter on this story: Dina Khrennikova in Moscow at dkhrennikova@bloomberg.net

To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Helen Robertson

©2019 Bloomberg L.P.