Rosneft CEO Igor Sechin ripped into OPEC Tuesday and warned that curbed oil output could lead to a supply shortage as soon as the fourth quarter.
Sechin said OPEC has “lost its teeth” and that the group’s refusal to cut output has caused the “destabilization” of the oil market, Reuters said.
OPEC has rejected calls by both OPEC and non-OPEC producers to curb output despite oil prices falling nearly 60 percent since July.
Sechin said Russia has asked OPEC for observer status but can not join the group, adding that privatization in the oil industry makes it difficult to coordinate output plans.
“We cannot operate as OPEC does,” Sechin said during a speech at the International Petroleum Week in London.
Sechin also said the fundamentals of the oil market “do not tally” with the dramatic drop in prices and warned that a supply shortage could materialize later this year as upstreams curb drilling activity.
Some analysts were skeptical of Sechin’s claim, pointing to the downward pressure placed on prices by slow global economic growth and slumping demand.
“I am concerned that economic growth in general, apart from the U.S., remains pretty low and that I think that is actually the key thing for energy demand growth,” Vitol’s chief executive oil trader Ian Taylor told the Financial Times.
Russia is currently the largest oil producer in the world with output hitting 10.58 million barrels per day last year.