MOSCOW, Dec. 28 (UPI) -- Russian Energy Minister Alexander Novak said in a television interview Monday it was Saudi Arabia that was to blame for the collapse in crude oil prices.
Despite last week's rally, Brent crude oil prices are down 36 percent from this time last year and continue to hold beneath $40 per barrel. High supply, despite the lower price for crude oil, and weak demand are putting downward pressure on the markets.
Novak said in an interview aired Monday by state-owned Rossiya-24 it was Saudi Arabia that was to blame for the collapse in crude oil prices.
"This year Saudi Arabia has ramped up production by 1.5 million barrels per day, which in fact destabilized the situation on the market," he said.
Ministers of the Organization of Petroleum Exporting Countries left their last regular meeting in Vienna in November with few concrete terms governing individual member production. De facto leader Saudi Arabia has said production needed to remain healthy to meet expected demand from Asian economies. Iran, meanwhile, wanted more room to grow as sanctions pressures ease in the wake of July's nuclear arrangement with world powers.
Data from the Russian Energy Ministry show total oil production for November was 10.8 million barrels per day, a slight decline from October but still above levels from the Soviet-era.
Russian Deputy Prime Minister Arkady Dvorkovich told Rossiya-TV the low price level for crude oil is unsustainable.
"For some time, any company, any producing country is able to sustain such low prices," he said. "But then investment will inevitably go down, which means that production will fall and prices will rise."
OPEC said balance between supply and demand may emerge by the second half of next year, a sentiment backed by the Russian energy minister. "New production in Iran may affect the market," he added.
Low crude oil prices are hurting exporting economies like Russia's. From September to October, gross domestic product grew by about 0.3 percent, compared with about 0.1 percent from the previous one-month period. U.S. GDP grew at about 2 percent in the third part. GDP growth of 0.7 percent is expected for Russia next year.