Abdullah al-Badri, Opec’s secretary-general, said the cartel is ready to embrace rivals and thrash out a compromise following the 72pc crash in prices since mid-2014.
"Tough times requires tough choices. It is crucial that all major producers sit down and come up with a solution," he told a Chatham House conference in London.
Mr al-Badri said the world needs an investment blitz of $10 trillion to replace depleting oil fields and to meet extra demand of 17m barrels per day (b/d) by 2040, yet projects are being shelved at an alarming rate.
A study by IHS found that investment for the years from 2015 to 2020 has been slashed by $1.8 trillion, compared to what was planned in 2014.
Abdalla El-Badri, OPEC secretary-general, speaks at Chatham House in London.
Mr al-Badri warned that the current glut is setting the stage for a future supply shock, with prices lurching from one extreme to another in a deranged market that is in the interests of nobody but speculators. "It is vital that the market addresses the stock overhang,” he said.
Leonid Fedun, vice-president of Russia’s oil group Lukoil, said Opec policy had set off a stampede, comparing it to a “herd of animals rushing to escape a fire”.
He called on the Kremlin to craft a political deal with the cartel to overcome the glut. “It is better to sell a barrel of oil at $50 than two barrels at $30,” he told Tass.
This is a significant shift in thinking. It has long been argued that Russian companies cannot join forces with Opec since the Siberian weather makes it hard to switch output on and off, and because these listed firms are supposedly answerable to shareholders, not the Kremlin.
Mr Fedun said Opec will be forced to cut output anyway. “This could happen in May or in the summer. After that we will see a rapid recovery,” he said.
He accused the cartel of incompetence. “When Opec launched the price war, they expected US companies to go under very quickly. They discovered that 50pc of the US production was hedged,” he said.
Mr Fedun said these contracts acted as a subsidy worth $150m a day for the industry though the course of 2015.
“With this support shale producers were able to avoid collapse,” he said.