* Gas and oil flow is in interest of both sides -Vitol's
* Gunvor business as usual, Russians very pragmatic -CEO
* Europe should develop shale, seek lower gas prices -
Alvera of Eni
By Dmitry Zhdannikov and Silvia Antonioli
LAUSANNE, Switzerland, April 1 Some of the
world's biggest oil and grains traders see little risk of any
disruption to supplies from Russia, they said on Tuesday,
despite the worst East-West crisis since the Cold War.
The annexation of Ukraine's Crimea region was unlikely to
lead Western powers to target Russian energy exports directly or
to prompt retaliatory supply cuts from Moscow, trading house
executives and co-owners told the FT Commodities Summit.
"Some of us are old enough to remember the end of the Cold
War days," said Ian Taylor, the head of the world's largest
independent oil trader, Vitol. "In the energy space, gas and oil
have tended to continue to flow because it is in the interest of
both sides that they continue to do so."
Oil prices have been supported by the crisis after the
United States and the European Union imposed sanctions on some
Russian government officials and businessmen loyal to President
Russia is the world's second-largest oil exporter after
Saudi Arabia and is a major grains and metals exporter.
"I am pretty confident there will be no interruption on
energy flows from Russia to Europe. It has not happened in the
last 40 years," said Christopher Delbruck, the head of the
global commodities division of Germany's E.ON and one
of the biggest buyers of Russian gas.
Taylor said he was more concerned about instability in the
Middle East and the almost complete loss of supplies from Libya,
where exports have fallen to less than 100,000 barrels per day
(bpd) from a post-civil war peak above 1 million bpd.
Brent crude oil prices briefly spiked to this year's
high above $112 a barrel at the start of March, but have since
eased to around $107 a barrel.
Trading house Gunvor CEO Torbjorn Tornqvist, who bought out
Russian co-founder Gennady Timchenko two weeks ago shortly
before Timchenko was hit with U.S. sanctions, said there had
been no impact on his company.
"It is business as usual at Gunvor... Russians are very
pragmatic," Tornqvist said. "Business and politics are much less
integrated than you may think ... The current crisis will be
Marco Alvera, senior executive vice president at Italian oil
major Eni, also a major buyer of Russian gas, said he
was concerned about risks of potential gas supply disruptions as
Europe depended on Russia for 30 percent of its gas demand.
"Certainly shale gas is something Europe should do, as
opposed to resist. And we probably need to convince some of our
suppliers that if gas prices do not come down, demand will
disappear," he said.
"Every new coal-fired power plant in Europe means fewer
Russian jobs for decades. Europe collectively is in a stronger
bargaining position than we think," he added.
He also said he did not believe Ukraine had enough shale or
conventional gas reserves to shift the energy balance in Europe
and drastically cut reliance on Russia in the long run.
"There is shale gas in Ukraine. The cycle to bring it to
production is three to four years. There is also conventional
gas. There are opportunities for conventional gas in Ukraine
that were planned to be exploited before the crisis," he said.
Swithun Still, director of Solaris Commodities, a Russia-
and Ukraine-focused grains trader, said he did not expect grains
exports from the region to be hit even if the West decided to
slap sanctions on energy exports.
"The oil market brings in a week the same revenue (to
Russia) that the grains market brings in a year, so if they are
going to target anyone it's going to be oil and gas and a couple
of banks, it's not going to be the grains sector," he said.
He said that although it was not business as usual in grains
ports such as Sevastopol in Crimea, flows of grains continued.
"Yes, it has been disrupted but I think the whole thing was
a bit overblown," Still said, adding that he saw no grains price
rally on the back of the current crisis.
Juan Luciano, president and chief operating officer at
Archer Daniels Midland, said he saw no problems so far
for his operations in Ukraine, where the firm has facilities in
the port of Odessa, a crushing plant and a small unit in Crimea.
"We don't have assets in Russia and this is something we
want to correct over time," he said.
(Writing by David Sheppard in London; Editing by Anthony