Dr. Rouben Indjikian, adjunct professor at Webster University Geneva, was speaking on the international crude oil price regime at the Third Marine Money Geneva Forum on 25 June in Hotel President Wilson. His comments on the margins of the Forum on new approaches to trade finance due to Basel III also became a part of the article of Tribune de Genève of 26 June 2015 devoted to the Forum.
Both themes are integral parts of the courses on commodities and trade finance that Dr. Indjikian has created and teaches at Webster University Geneva every year.
The introductory presentation of Dr. Indjikian on the current state and outlook for international oil price regime was a part of the Forum’s first session entitled “Getting to grips with oil at $60? Who wins and who loses?”
The session was moderated by Mr. Chris Jones, Energy and Resources Industry Leader, Deloitte, while the panelists included: Mr. Jean-Matthieu Sternberg, Consulting Senior Advisor, Pira Energy Group; Prof. Giacomo Luciani, Adjunct Professor, Graduate Institute, Geneva; Dr. Kaspar Bänziger, Director, Preview Energy; and Mr. Peter Hendry, Head of Trading, Nekton Global DMCC.
The session was quite interesting and lively due to differing views on the nature and current levels of oil prices and their future direction. According to Dr. Indjikian low volatility and current crude oil prices band may stay in coming few years, until the lower investment and higher demand will become critically important that together with other short term shocks may precipitate the next oil price spike. One of the panelists found that signs of higher demand, lower stocks and spare capacities are evident already now and foresaw an increase in prices in a nearer future.
The other topics of the forum included: transportation of commodities and the state shipping markets; supplier and third party relations; perils of counter party risk; strategies in mining, commodities and shipping; trends in trade finance; shipping finance; the consequences of another year of opex only freight.
As one third of international oil flows is traded in Geneva, the discussion of new lower oil prices and their prospects was the central topic of the forum, which being in its 3rd edition became a noted event in the area of commodity, shipping and finance, and hence attracted many representatives of trading and shipping companies, banks and law firms, and other commodity related service providers from Geneva and other places.
Equally the issues of trade finance and, in particular, banks decision to diminish their activities in this domain, was a matter of concern. In that respect Dr Indjikian gave his views reflected in above mentioned article of Tribune de Genève on erroneous approach of some major banks top management to diminish their trade finance activities as a part of exercise of balance sheet shrinking in order to correspond to the new international standards of Basel Committee on Banking Supervision known as Basel III. According to Dr. Indjikian cutting on trade finance activities is inopportune, as it represents a secure, self-liquidating mode of financing, providing a steady stream of revenues to banks, and, at the same time, supporting international trade in goods and services so important for economic development of many countries.