Tillerson, Oil and Russia
US President Donald Trump's nomination of Rex Tillerson as his secretary of state has elicited mixed reactions. Tillerson has good experience in energy issues and was long serving as the CEO of the world's second largest oil company ExxonMobil. His activities were limited to economy and he has no experience in political and security issues. For this reason, his appointment as the secretary of state drew criticisms. Besides, an important point which caused controversy about Tillerson was his close relationship with Russian President Vladimir Putin. This relationship was challenged in the US; however, it gave rise to optimism about improvement in trade ties between the two countries particularly in the oil and gas sector.
This article reviews Tillerson's role in the future of US-Russia relations and its effects on the oil market.
After being named secretary of state, Tillerson said he would cut all his financial and business ties with ExxonMobil in a bid to avoid conflict of interests.
Tillerson has also "committed" to the State Department that he would sell the more than 600,000 shares in ExxonMobil he currently owns in case he was confirmed secretary of state.
"Under the agreement developed in consultation with federal ethics regulators, if Tillerson is confirmed as secretary of state, the value of more than 2 million deferred ExxonMobil shares that he would have received over the next 10 years would be transferred to an independently managed trust and the ExxonMobil share awards would be cancelled," ExxonMobil said in a press release. "The trust would be prohibited from investing in ExxonMobil and the trustee would manage the assets consistent with government ethics rules. Payments to Tillerson from the trust would be subject to the same 10-year schedule that the cancelled awards would have had if they had continued in place."
Oil Firms Back Tillerson
In spite of the alleged agreement, Tillerson remains interested in ExxonMobil. He is even likely to get his post back after his tenure ends.
Other US oil companies threw their weight behind Tillerson as secretary of state. He owes his nomination at this post to veteran American politicians who own shares in oil companies. Robert Gates, a former chief of the Central Intelligence Agency (CIA) and a former secretary of defense, had recommended Trump to pick Tillerson as his secretary of state. Former US secretary of state Condoleezza Rice made a similar recommendation in her meeting with Vice President Mike Pence. Gates and Rice co-own a company that advises ExxonMobil. Dick Cheney, the hawkish former vice president, also lobbied for neoconservative Tillerson to become secretary of state. Cheney's relations with oil companies were no secret to anyone even when he was serving as vice president in the administration of George W. Bush.
Tillerson and Putin
Tillerson's appointment at the head of US diplomacy coincided with sharp criticisms of his close relations with Russia and his stance on the US sanctions on Russia. Not only Democrats but also outspoken Republicans like Senators Marco Rubio, John McCain and Lindsey Graham called into question the close ties between ExxonMobil and Russia.
Some US media such as The Washington Post claimed that Russia meddled with Tillerson's nomination as it did with Trump's victory in the 2016 election. Tillerson made it clear that he had good relations not only with Putin but also with many other Russian officials.
Over the past years, a number of factors had pushed Tillerson closer to the Russians.
First and foremost is that Tillerson was a close friend of Putin. Their friendship dates back to the 1990s when Tillerson was leading an ExxonMobil project in Russia's Sakhalin. These ties were strengthened later on when Putin came to power in 1999.