Russia’s largest oil company Rosneft’s CEO Igor Sechin warned on Thursday that the global energy sector is embroiled in a hybrid war and gold could soon rival the dollar as the world’s primary currency.
Limiting dollar settlements will increase the capabilities of national currencies, said Sechin, delivering a keynote speech at the 17th Verona Eurasian Economic Forum in Ras Al Khaimah, United Arab Emirates.
‘The main competitor of the US currency will be gold, which has been used for thousands of years for settlements,’ Sechin added.
Sechin noted that the US economy benefits significantly from maintaining the dollar as the global reserve currency.
For instance, he said, the cost of debt financing in US dollars is artificially low. Citing US-based consulting firm McKinsey’s estimations, he said that the US derives an annual direct financial benefit of $100 billion from using the dollar as a reserve currency.
Sechin welcomed former US President-elect Donald Trump’s approach to preserving the dollar’s status but added that it was ‘at odds with the current US policy’ of restricting the dollar’s use through sanctions.
– US losing leadership in various fields
Noting a period in which the US is losing its leadership in scientific, technological, industrial, and financial fields, Sechin said, ‘The US has suffered a loss of leadership in the scientific, technological, industrial and financial spheres that was hard to imagine 20-30 years ago.’
Rosneft’s CEO also highlighted the ‘global repercussions of US policies, which are evident in both Europe and developing nations.’
‘Conflicts in the Middle East, Ukraine, Latin America, and the Asia-Pacific region are being deliberately escalated and created,’ he said.
Recalling the ancient Greek historian Thucydides, Sechin said, ‘The hegemon’s fear of the emergence of alternative global power centers inevitably leads to war with them.’
‘This war has already begun,’ he said and added that ‘the world energy industry is no exception and has become one of the targets and tools of this hybrid war.’
– US benefits from OPEC+ output cuts
Sechin noted that the US has also benefited from the actions of the OPEC+ group, which includes the world’s largest oil producers.
He said that the decisions made by OPEC+ in 2016 and 2020 to stabilize the oil market significantly supported the US shale oil and gas sector.
Rosneft CEO also highlighted that stabilizing oil prices at high levels has enabled the US to become a leading energy-exporting country.
Sechin noted that the value of Russia’s natural resources is approximately $100 trillion, adding that just as using the dollar as a sanctions tool is a mistake, the policy of forcibly removing Russia from the energy market is another similar error, one that will inevitably lead to the collapse of the global economy.
‘Today, energy demand is growing in developing countries, where 750 million people still have no access to electricity at all. At the same time, per capita energy consumption in the US is 3.5 times higher than the average consumption on the planet and 10 times higher than in India,’ Sechin said.
‘To improve the living standards of the population of developing countries to at least half the level of the ‘golden billion’, it is necessary to almost increase oil production by two-fold,’ said the head of Rosneft.
