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London - The head of Kremlin-controlled energy giant Rosneft targeted Opec and the United States on Tuesday as he launched a broadside at the forces behind the oil price crash that has hit Russia's economy hard.
Igor Sechin, one of President Vladimir Putin's closest allies, said during a rare visit to London that Opec had erred in not cutting output, as he blamed the low oil price on factors from financial speculators to US government policy.
Oil has more than halved since June as fast-growing US shale supplies overwhelmed demand. The decline accelerated after the Organisation of the Petroleum Exporting Countries (Opec), of which Russia is not a member, chose to try protect its market share rather than cutting output to support prices.
"Opec has lost its teeth," Sechin said through an official translator at London's International Petroleum Week, an annual industry event. Opec's decision to let prices fall had led to a "destabilisation" of the market, he said.
Sechin, who has been targeted by Western sanctions over Russia's role in the Ukraine crisis, said the sharp collapse in oil could not be explained only by the forces of supply and demand, hinting there may be other factors at play.
While careful not to go as far as some politicians and analysts, who have suggested the price crash was orchestrated by the United States and Saudi Arabia to hurt Russia and Iran, Sechin nevertheless said prices have been "manipulated".
Sechin described the United States crude oil export ban as a "protectionist" move that distorted markets, finding some common ground with a number of US politicians who have been campaigning to lift the legacy of the 1970s Arab oil embargoes.
And he attacked the role of oil futures markets in London and New York, which help set the price of crude globally, where trading volumes have soared over the past decade.
"We need to control the influence of financial players," on oil price movements, Sechin said.
"It is necessary to increase the share of physical volumes (versus futures trading) to 10% to 15% and to develop regional trading platforms for crude oil."
Sechin's broadside at the oil market comes as Russia, the world's largest oil producer, has been one of the hardest hit economies by the collapse in crude, with the rouble currency falling to a record low against the US dollar this year.
The International Energy Agency (IEA) warned on Tuesday Russia faces a "perfect storm" of lower prices, international sanctions and currency depreciation that could threaten its oil output, which hit a post-Soviet high last year.
Russia vs. Opec
Sechin's comments on Opec on Tuesday may drive a further wedge between Russia and the group, which in the past has requested Moscow join output curbs to support prices, though the Kremlin has never complied.
Describing the 12-member group as a "cartel", Sechin said Russia would never join Opec as its energy industry is made up of private energy companies. Rosneft is a publicly-listed company, though the Kremlin owns more than 50%.
He criticised the dominance of Opec by its most powerful members, a thinly-veiled reference to the world's largest exporter Saudi Arabia, which pushed the policy of not cutting output in November even as some poorer members protested.
"This organisation lost the unity of its members and in some cases is not respecting the interests of some of its members," Sechin said.
Opec ministers and delegates have blamed non-Opec producers such as Russia, Mexico and Kazakhstan, as well as US shale oil production, for the oversupply in the market.
Some Opec ministers have suggested the group could act to balance the market only if non-Opec producers like Russia acted in tandem.
Sechin forecast, however, that lower prices would help balance the market by the end of this year, arguing US shale oil output - which the IEA argues has revolutionised energy markets - would be particularly hard hit.
"Revolutions usually don't last long and after that the harsh reality comes in," Sechin said.
