October 24, 2019 / 12:58 PM / 25 days ago

Rosneft's Sechin: Saudi oil site attacks hit kingdom's status as a reliable supplier

VERONA, Italy (Reuters) - September attacks on Saudi oil assets have created doubts about Saudi Arabia’s status as a reliable oil supplier, Igor Sechin, Chief Executive of Russia’s Rosneft (ROSN.MM), said.

FILE PHOTO: Chief Executive of Rosneft Igor Sechin attends a meeting of Russian President Vladimir Putin with Indian Prime Minister Narendra Modi on the sidelines of the Eastern Economic Forum in Vladivostok, Russia September 4, 2019. Sputnik/Mikhail Klimentyev/Kremlin via REUTERS

The attacks, which temporarily shut down around half of the kingdom’s oil output, gave “grounds to rethink Saudi Arabia’s role as an undoubtedly reliable oil supplier”, Sechin told a conference in Italy on Thursday.

The oil executive is a close ally of President Vladimir Putin and one of Moscow’s key players in the global oil production cut deal.

Sechin said Russian military action had forced some Islamic State militants out of Syria and into other countries, including Iraq, adding that these militants might have carried out attacks on Saudi Arabia oil facilities.

“It is important to destroy Islamic State, and not only in Syria, to bring the stability back to the region,” Sechin said.

He did not provide any supporting evidence for his comment on the Saudi oil site attacks.

Iran-backed Houthis fighting a Saudi-led coalition in Yemen say they carried out the attacks. Riyadh and Washington blame Iran for the assault, a charge Tehran denies.

Russia has been supporting Syrian President Bashar al-Assad in its more than eight-year civil war, helping him regain control over territories lost to his opponents at the beginning of the conflict.

In the past, Sechin has openly spoken out against the global oil production cut deal led by Saudi Arabia and Russia despite Rosneft playing its part in upholding Russia’s commitment, saying that it helps the United States increase its dominance of the global oil market while countries taking part lose out.

On Thursday, Sechin told the conference that U.S. sanctions on Iran, Venezuela and Russia covered around a third of global oil reserves and a fifth of the world’s oil production.

With U.S. oil supplies to the European Union more than doubling after the sanctions on Iran, Washington was the ‘main beneficiary’ of the restrictions, Sechin added.

“If we have said in the past... that there were three regulators of the global oil market - Russia, Saudi Arabia and the United States - then now, the sole regulator remains the United States and this should be admitted,” Sechin said.

As a result of U.S. sanctions on Russia since 2014 following its annexation of Crimea peninsula, Rosneft last month started to switch the currency of its export contracts to euros.

Sechin, who didn’t mention the currency switch in his speech, criticized the use of the U.S. dollar as the global reserve currency.

“We see that (U.S.) financial monopoly could and should be confronted,” Sechin said. Speaking to reporters after the session, Sechin said that Rosneft had made the switch to diminish the risks from international sanctions.

Reporting by Olesya Astakhova; Writing by Katya Golubkova; Editing by Jon Boyle and Kirsten Donovan

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