A tailings pond near the Syncrude tar sands operations near Fort McMurray,
Alberta, Canada on September 17, 2014Reuters/Todd Korol/File Photo
The world's oil-exporting nations discussed their failure to limit production at a meeting of the oil-producers' cartel, Opec, and non-Opec members in Abu Dhabi that kicked off on Monday. And Russia was having to face up to the effect of new US sanctions.
The two-day meeting, chaired by Kuwait and Russia, came as Moscow faced tough new sanctions from the US for allegedly meddling in last year's American presidential election.
The issue was carefully avoided when US Secretary of State Rex Tillerson met Russian Foreign Minister Sergei Lavrov on Sunday for the first time since the US-imposed sanctions came into place.
But it was expected to be the elephant in the room when representatives from the 14 Opec countries and 11 other oil-producing nations, including Russia, gathered in Abu Dhabi on Monday.
"Russia’s not going to be a serious energy actor at least in the foreseeable future," Mitchell Belfer, Director of the Euro Gulf Information Center in Rome, told RFI, suggesting the US sanctions undermine Russia's position at these talks.
"The Russians are pushing for a reduction in [oil] production because they need to try and regain their bearings again. Sanctions will make it more difficult."
No need for panic
They did already in 2014 when the US first imposed sanctions on Moscow, at that time for annexing Crimea. The collapse in oil prices made things worse.
The problem is oil prices haven't picked up since, they're still FLUCTUATING at around 50 dollars a barrel. It is worth remembering that only three years ago the price was well over 100 dollars.
Hence Opec's decision to reduce output in order to push up prices, although big producers, notably Saudi Arabia, have failed to abide by it.
"There's no ground for panic," Alexey Turbin, who was an advisor to Russian energy minister Igor Yusufov in the early 2000s, told RFI. "We are sure that our counterparts at Opec will take decisions which will correspond to the joint interest of oil producers."
Countries at the summit agreed to reduce their output by almost two billion barrels per day last November and extend production cuts for a further nine months till March 2018.
No matter how much good will there is, however, Opec has no official mechanism for punishing members that stray from their pledges.
Turbin insists that Russia will stick to global reduction cuts so long as they don't "contradict the national interests.”
Sanctions to hurt gas sector
Russia's national interests at present are less centred on its oil sector than on in its gas industry.
The new US sanctions risk hurting its exports of natural gas to Europe.
"There will be some negative effects," admits Turbin, particularly on Russia's pipeline projects such as Nord Stream 2. "But the pipeline, which will unite the Russian shore and Germany, which is 1,244 kilometers long, will be constructed."
And European powers are putting pressure on Washington to ensure it does go ahead. Berlin has already threatened to impose counter sanctions on the US for the potential damage to its energy sector.
"It's absurd," says Belfer, "Europe trying to prevent American sanctions against Russia because that will affect the energy sector in Europe. But you know as they say, all's fair in love and war and in this case this is an economic conflict."
Experts in Germany suggest that the US sanctions against Russia are designed to PROMOTE the American economy, by ensuring that European countries buy American gas and not Russia's Gazprom.
The sanctions directly target energy export pipelines that Washington fears will increase Moscow’s influence over Europe’s gas supplies.
“Surely if prominent European companies will not find possibility to take part in this project, the Russian side. Gazprom would have to find other ways to finance this pipeline and for other technologies to be applied," says Turbin.
Before adding, "These sanctions are not a tragedy for Russia’s oil sector."
But with US production of oil from shale rocks set to grow by around 780,000 barrels a day by the end of the year, with more to come in 2018, Russia's hopes of keeping oil production low could be dashed.