Rosneft CEO Igor Sechin said over the weekend that he believes internal strife has severely curbed OPEC’s market power.
Sechin told Reuters that cartels have lost their control over the oil market and added that OPEC “has practically stopped existing as a united organization.”
Russia was among the country’s that met with OPEC and non-OPEC representatives in April to try to secure a production freeze deal in the hopes of supporting oil prices.
Those efforts failed after Saudi Arabia said it would not participate in a deal if Iran did not sign on.
Iranian officials did not attend the meeting.
Iran has consistently voiced its opposition to a production freeze as the country looks to grow production now that Western sanctions have been lifted.
Sechin told Reuters that he had been skeptical that any deal production deal would materialize.
“The company [Rosneft)] was skeptical from the very beginning about the possibility of reaching any sort of joint agreement with OPEC’s involvement in current conditions,” Sechin said.
Sechin added that any attempts to support oil prices will most likely fail and that prices will only recover when supply and demand are back in balance.
During a speech at the opening of FT Commodities Global Summit in April, Sechin said that he expects the current global supply glut to be alleviated within two years.
The glut “will be eliminated during this period due to the growth of the global economy and consumption, depletion of the producing fields and temporary shutdown of complex and insufficiently effective projects. Low prices phase cannot last long, at least by the major reason – current prices do not secure the complete cost cycle, i.e. they generate losses for the companies, that work at complex fields,” Sechin said.
Rosneft has pushed past fellow state-owned firm Gazprom to become the largest company in Russia on a market capitalization basis last month.
Rosneft’s revenues fell 6.4 percent year-over-year to $78.49 billion in 2015 while free cash flow climb to about $9.9 billion last year, up from $9.08 billion in 2014.