West’s sanctions on Russia destroyed global energy markets, hurt Europe: Rosneft CEO Igor Sechin

“There is no unified global energy market, and energy security is no longer global,” Sechin said at the India Energy Week in Bengaluru. His statement was shared by Rosneft on Tuesday.

Various western majors have sanctioned Russia, particularly its energy sector, in the aftermath of its invasion of Ukraine about a year ago. The actions resulted in extreme volatility in the gas market as Europe started cutting down imports from Russia. As a result, global gas prices skyrocketed in 2022.

The oil market also saw volatility with prices touching multi-year highs. Shunning of Russian crude by many Western buyers forced Moscow to sell it at a discount to willing buyers like India and China. With Indian refiners snapping up discounted Russian crude, Moscow has emerged as India’s biggest source of oil. A year ago, it was only a marginal player in India’s oil trade.

Sechin claimed that instead of hurting Russia, the sanctions and curbs imposed by the West have hurt Europe. Russia achieved more significant results than many of the world’s leading economies despite “unprecedented sanctions, pressure, and confrontation with almost the entire Western world,” he said.

According to Sechin, despite the war in Ukraine, Russia was able to implement major economic programmes, and termed it a “great psychological victory” for Moscow, which will “predetermine” its success in other areas.

Sechin referred to Europe’s decision to abandon long-term gas contracts with Russian firms and switch to costlier spot purchases as “contrary to common sense”. Against the background of green transition and underinvestment in conventional energy, this led to an unprecedented increase in gas prices, he said.

The Rosneft CEO opined that Europe has lost the advantage of energy security by severing its access to cheap Russian gas and is now forced to pay up to five times the price. He also pointed a finger at the United States, claiming that US energy majors have profited from the energy crisis in Europe.

“And when the Russian competitor was driven out of the European market by sanctions and pressure, the Americans proposed to return to long-term contracts that would guarantee a return on investment. We are talking about ordinary unfair competition… We observe the capital flight and transfer of production, primarily to the United States,” he said.