Mr Sechin said that "if the oil prices on the global market maintain their current level, the Russian oil sector will have to cut supplies by 16 million tons annually or 320,000 barrels per day next year, as well as reduce investment, which may result in a more radical curtailment of production in the near future." According to him, the implementation of such forced measures could have lasting consequences.

The Deputy Prime Minister also said that Russia cut oil exports by 350,000 barrels per day in November in response to the "negative price dynamics."

"Of course, the Russian Government is closely monitoring these issues," Mr Sechin said, adding that it was considering measures to set up a reserve system of deposits, oil, and petrochemicals for preventing speculative market fluctuations and ensure flexible response to changes in domestic and international demand.

The official said that oil prices, and especially oil price forecasts, should reflect objectively growing expenditures on the discovery and development of Greenfield deposits.

"I repeat, oil prices should adequately reflect these growing expenditures rather than stock market speculations," he said. "This approach could become the basis for developing reliable long-term relations, which is important not only for oil-producing countries but also for everyone who wants their economies to develop in a stable and predictable manner."

Mr Sechin said that responsible oil market players should discuss ways to ensure stability in the strategic perspective, adding that this should not be interpreted as collusion with the purpose of subsequent "energy blackmail". On the contrary, such open interaction should make production volumes and prices predictable for all market players, and strengthen global energy security as laid down in the documents of the international community.

The Deputy Prime Minister said they should also discuss reforming the current system of linking oil prices to one currency, and consider creating new trade venues that would be geographically closer to oil production and consumption, for example in St Petersburg, Astana, Shanghai, Riyadh, London, or Zurich.

To more fully take into account the regional characteristics of oil, Russia proposes that oil prices be determined with due regard of the recognised oil brands as well as the brands produced in OPEC and Russia, Mr Sechin said.

He added: "The talks with the OPEC leadership will result in the establishment of a joint working group of the OPEC Secretariat and the Russian Energy Ministry, which will coordinate approaches toward solving the most important problems of the global oil sector that imply interaction. We believe that the granting of permanent observer status to Russia would facilitate closer coordination."

Mr Sechin noted that Russia had received tentative approval for its proposal to host an OPEC event.

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On Tuesday, Igor Sechin said during his meeting with Saudi Arabian Oil Minister Ali al-Naimi that Russia and Saudi Arabia should strengthen cooperation during the global economic crisis.

He said Russian-Saudi relations in the fuel and energy sector were a priority sphere of cooperation, and noted that Russian companies LUKoil and Stroytransgaz were energetically implementing projects in Saudi Arabia.