A deal between Singaporean commodity trading company Trafigura and Russia’s Rosneft, in which Trafigura takes a 10% stake in a huge Arctic oil project, has demonstrated both how Russia is working to expand its oil production and how it is securing the finance for them at a time where European oil majors are pulling away from investment in new oil projects. The Vostok Oil project aims to tap an estimated 6 billion tonnes of the resource in the Vankor and Payakha clusters in Siberia’s Taymyr province, transporting it via the North Sea Route to markets in Europe and Asia. Further investment in the project will be sought and is expected to come from China and India, and as part of the project a new 770 km pipeline and a new port will be built. Analysts JPMorgan see the project as part of Russia’s push to monetise its oil reserves as the window to do so narrows as the world pushes towards net-zero emissions by 2050.

Meanwhile, the Financial Times reports that it is expected that incoming US President Joe Biden will place less of a focus on oil markets than his predecessor President Donald Trump, but that tighter pollution and permitting rules could dampen domestic production. A curiosity of Mr Trump’s period in office and his championing of ‘energy dominance’ has been that the S&P 500 energy share-price index has fallen by more than a third during his tenure, while under Mr Obama, the index rose by more than 50%. A further curiosity is that the market has been recovering recently despite the election of Mr Biden, whose campaign was more negative towards the shale oil sector than Mr Trump’s. What it probably shows is that policy is only a part of the set of circumstances that affect markets.