Rosneft CEO Igor Sechin said on Saturday that US energy companies were the biggest beneficiaries of the Strait of Hormuz closure, while warning that prolonged disruption to the vital shipping route could ultimately undermine global oil demand and accelerate interest in alternative energy sources, according to Reuters.Speaking at the International Economic Forum in St. Petersburg, Sechin said the closure of the strategic waterway, through which about a fifth of global crude oil supplies pass, has reshaped energy markets in a way that favors the United States.“The main beneficiaries, of course, are American companies, which have gained non-competitive advantages and the ability to secure high-cost supplies,” Sechin said, according to what was reported by Reuters.He described the closure of the Strait of Hormuz as “an attempt to reshape global energy market regulations in favor of the United States,” adding that measures aimed at targeting Iran “backfired on the entire world,” and that the associated strategic risks were underestimated.Read also: Drilling, sanctions and control: Inside the oil economics driving Trump 2.0
He warns of long-term risks to oil demand
Sechin warned that continued instability around the Strait of Hormuz could have broader consequences for the global energy sector.
“The continuation of tension in the Strait of Hormuz for an extended period undermines demand for oil in the long term. It may also lead to another wave of interest in alternative energy,” he said.The comments come after Iran closed the strait following US and Israeli attacks on the country in February, while the US imposed a blockade on Iranian ports, according to Reuters.
Oil prices may decline if the strait is reopened
Sechin said that oil prices may gradually decline if the Strait of Hormuz is reopened in the near future.According to Reuters, crude oil prices are expected to remain in the range of $95 to $96 per barrel by the end of this year, decline to $80 to $85 per barrel within a year, and return to broader market fundamentals by the second half of 2027.He also said China appeared better prepared than most countries to confront the crisis due to what he described as well-planned state policy.However, he warned that other key maritime checkpoints, including the Strait of Malacca, Bab el-Mandeb and Gibraltar, may also face risks of disruption.
Sitchin highlights broader global challenges
In a speech titled “The Beginning of the End or the End of the Beginning: What’s Left at the Bottom of Pandora’s Box?”, Sechin said the world faces increasing challenges, including militarization, financial market risks and looming shortages of vital resources.“At the bottom of the box, we will inevitably find global electricity shortages, food shortages, copper and other mineral shortages, and water shortages,” he said.
He questions the effectiveness of OPEC+
Sechin also raised concerns about the effectiveness of the OPEC+ alliance, saying that the group had lost part of its potential after the exit of countries including the United Arab Emirates and Qatar, according to Reuters.He said that NATO production decreased from 58 million barrels per day to 37 million barrels per day during the past decade.The Rosneft head noted that while most major OPEC+ members have increased production since the agreement was signed in 2016, Russian oil production has fallen by 1.5 million barrels per day.“This is a 15% decrease that will have to be compensated for by necessary investments of at least 10 trillion rubles,” Sechin said, adding that Russia expects greater investment cooperation with OPEC+ member states in the future.