At a meeting with senior business executives at the New York Stock Exchange on Friday, the Russian leader said that his country’s booming oil output could supply 10% of US crude imports within five to seven years.
“According to some estimates, Russian oil supplies within the next five to seven years could account for more than 10% of US oil imports. We are thinking about this and how to develop the transport infrastructure to resolve this, and I believe it is a perfectly achievable aim,” he said.
Putin, who then headed to Camp David for a summit with his US counterpart George Bush, said both countries stood to gain immense benefits from their energy partnership.
“Russia gets access to a wider market and investment, and your energy market will become more stable and predictable. In today’s not very stable world, to have stable energy supplies for the economy means a lot,” he said.
Putin, who later met the heads of US oil companies Conoco and ExxonMobil, blamed Cold-War era trade restrictions for slowing business ties.
US investment in the Russian energy sector has been modest, hamstrung in part by the Jackson-Vanik amendment that denies it favourable trade terms, a measure designed to punish the Soviet Union for limiting the emigration of Soviet Jews.
“Russia gets access to a wider market and investment, and your energy market will become more stable and predictable”
“It’s such an archaic thing, we cannot understand how it exists today and is still applied. Of course it is damaging, damaging to the spirit of our cooperation,” Putin said.
Russia, already the world’s second largest supplier of crude after Saudi Arabia, is hoping to attract US investors to its oil industry that would help it regain some of the market share it lost with the collapse of the Soviet Union.
The US, the world’s largest importer, wants to build up its purchases of Russian crude, currently insignificant, to diversify its sources of supply and reduce its dependence on the volatile Middle East.
For the moment Russia lacks the means of shipping its exports to the US and has none of the infrastructure needed to load supertankers.
However several projects are under consideration, including the construction of a deepwater terminal at the port of Murmansk, in Russia’s far north, that would facilitate the delivery of Russian crude to the US market.
A feasibility study for a pipeline from western Siberia to Murmansk has been approved and the project could in theory go on stream by 2007.