US Energy Minister Rick Perry will visit Moscow this week for talks with the Russian Energy Minister Alexander Novak, as well as possibly with other Russian officials and market participants. According to the Kommersant's sources, a wide range of issues will be touched - from the situation on the oil market in the context of the actions of OPEC+ and the impact of the US sanctions against Iran, which will enter into force in November, to discussion of the possible new restrictions against Russia, in particular against the Nord Stream-2 pipeline project. The Ministry of Energy declined to comment.

Regarding other activities within the framework of the Rick Perry's visit, there is no clarity. It is assumed that he can meet with representatives of the oil and gas industry. But many key figures - head of Gazprom Alexei Miller, head of Rosneft Igor Sechin, co-owner of Novatek Gennady Timchenko, and also Deputy Prime Minister Dmitry Kozak, who is in charge of energy, are not available because they are under personal sanctions by the USA. Director and co-owner of Novatek Leonid Mikhelson will be at the Eastern economic forum in Vladivostok.

The arrival of Rick Perry will be the first visit of a high-level US official to Russia since April 2017, when Rex Tillerson, who at that time held the post of head of the US State Department, arrived in Moscow. The current Secretary of State Mike Pompeo has yet to visited Russia, although at the end of June the adviser to the President of the United States Donald Trump on
national security John Bolton came to Moscow.

Against the background of the continuing deterioration of the bilateral relations, the Rick Perry's visit looks unusual and may be criticized in the United States, the interlocutors of the Kommersant note. But Donald Trump's administration may point to the importance of the meeting for American oil producers. Russia and Saudi Arabia are the leaders of the OPEC+ deal to reduce production, and on September 23, the parties to the deal at the summit in Algeria will decide whether to increase quotas.

The oil prices rose to $76 per barrel, as the market expects the fall in the Iran's export by about a quarter because of the US sanctions. In this situation, Moscow and Riyadh should make up for the possible shortage of oil and contribute to a certain reduction in the prices. But if you raise the production too much, you can, on the contrary, drop the quotes, which will have a negative impact primarily on shale oil producers in the United States. In this situation, it may be important for the Russian and US authorities, as the two largest oil producers, to reconcile positions and calculations on the world market balance.

In addition, a bill on the sanctions against the Nord Stream-2 project is at the US Congress. Donald Trump has repeatedly stated that he doesn't like the gas pipeline project, but so far the administration has been inclined to the fact that the sanctions against European partners of Gazprom on the gas pipeline (Shell, Wintershall, OMV, Engie, Uniper) are undesirable, as they will complicate relations with Germany.

"On the one hand, the good news is the fact of contacts, in the fact that the channel is not completely closed and not frozen," - says expert of the Russian Council for International Affairs Ivan Timofeev. He notes that at the meeting the Ministers will be able to "discuss professionally, including the effect of the sanctions that may have global consequences for the market", as
the example of UC Rusal shows. But, according to Ivan Timofeev, "the bad news is that the new sanctions against Russia are likely to be inevitable, including in the energy sector". He recalls that the US administration has already announced its readiness to impose the sanctions in the framework of the "Skripal case" in accordance with the act of 1991 on combating the spread of chemical weapons. The act allows it to impose strict restrictions on the export and import of goods and can be applied to equipment for the oil and gas industry.

Source: Rusmininfo     l     KeyFacts Energy Industry Directory: Rusmininfo