LUKoil Head Sees No Alternative to OPEC 'Despite Political Factors'

President of Russian oil company LUKoil Vagit Alekperov said Thursday that at the moment there is no alternative to the Organization of the Petroleum Exporting Countries (OPEC), despite a recent impact of "political factors."

MOSCOW (Sputnik) — In April, OPEC and major non-OPEC oil producers failed to agree on freezing oil output at January levels to shore up prices. Saudi Arabia backed out of the deal, insisting that Iran, its regional rival which has been boosting oil production after years of international sanctions, should be part of any production cuts.

"There is no alternative to OPEC at the moment. OPEC was always a sufficiently effective instrument to influence the market, it has maintained the demand-supply balance. Recently, unfortunately, there were many political factors, they also affected OPEC's functioning," Alekperov told Rossiya 24 television.

Alekperov also noted that the OPEC session in June was constructive enough, as some solutions to stabilize the market was identified, although they have not yet been adopted.

The LUKoil head stressed that all the members of OPEC were motivated to preserve the organization.

Oil prices have plunged over the past two years from $115 per barrel in June 2014 to less than $30 per barrel in January 2016. The price drop has been attributed to slowed global economic growth, decreasing energy demand and major producers flooding the market with oil.

Following the failed talks in April, OPEC members met in Vienna on June 2. Cartel member states did not manage to agree on any major policy changes or establish a cap on oil production. The next OPEC meeting will be held on November 30.