Russian President Vladimir Putin unveiled the final extension of a new $25 billion oil pipeline to the Pacific that underscores the energy power’s gradual shift away from stagnant European markets.
The East Siberia – Pacific Ocean (ESPO) link is also expected to expand sales to the United States and fulfil Putin’s dream of cementing Russia’s place as a dominant force on international crude markets.
Moscow hopes to make ESPO into a benchmark in the Asia Pacific region that competes with WTI — the US oil standard whose price some traders believe is too heavily based on domestic political factors.
But analysts worry that Russia may currently lack enough accessible oil in its underdeveloped East Siberia fields to keep the line fully flowing despite strong demand in China and Japan.
Putin brushed those concerns aside as he joined in the ribbon-cutting ceremony by video link from the Far East city of Khabarovsk.