Top Putin aide warns about future of energy industry

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Global demand for oil and gas will eventually start to wane, Maksim Oreshkin has predicted

The oil and gas sector is not the most promising part of the Russian economy as global demand for crude is expected to fall in the long term, Maksim Oreshkin, the top economic adviser to President Vladimir Putin, stated on Wednesday.

Hydrocarbons remain a highly important part of the country’s economy and provide a significant share of budget revenues, but they are clearly not promising in the longer term, he told the radio station Komsomolskaya Pravda.

“What you definitely shouldn’t expect is that there will be some kind of rapid growth either in the consumption of these goods or in their prices. But the fact that this market will remain an important segment of the global economy for at least 10-15 years is absolutely certain,” Oreshkin cautioned.   

He noted that Russia’s main challenge will be to remain the most competitive producer of oil and gas as global demand eventually starts to wane. “This will not happen in the coming years, but at some point it will begin to decline,” the adviser said. 

According to Oreshkin, the structure and geographical breakdown of consumption will change in the coming years. In his view, Russian companies should shift their focus from pure hydrocarbon production to the petrochemical industry.   

“Oil is not only about gasoline, it’s not just energy. These are, for example, petrochemicals, gas chemistry, plastics and various other materials,” he said, forecasting that many types of products associated with the petrochemical industry will grow rapidly in the near future.

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