Oil producers fail to honour output pledges

The agreement between OPEC and certain producers outside the cartel to remove surplus oil from the world market got off to a bad start last month, with both sides failing to cut output as much as they promised.
The Paris-based International Energy Agency estimated, in its latest monthly report, that the 10 OPEC members with supply quotas cut their production by 640,000 bpd to 23 mm bpd. This was less than half their promised 1.5 mm bpd cut. But the IEA report also cast doubt on whether three of the five non-OPEC countries that promised to reduce production or exports by nearly 500,000 bpd had carried out their side of the bargain.

Russia and Angola actually increased their crude production by 60,000 bpd and 70,000 bpd, respectively, last month. Moscow had committed itself to reducing 150,000 bpd of crude exports rather than production, but observers believe its extra crude output in January will find its way on to the world market in refined products.
Oman ignored its reduction pledge bymaintaining production last month, according to the IEA, which reported that only Norway and Mexico appeared to honour their output-cutting pledges to OPEC last month. The growing glut in domestic refined oil has driven Russia to reduce export tariffs from the start of next month in an effort to support prices.

Igor Yusufov, the energy minister, said Russia had not yet decided whether it would respond to OPEC pressure by continuing crude export cuts in the second quarter of the year. But he claimed that the reduction in the first quarter had depressed fuel prices by as much as 50 %, with 4 mm tons of refined product currently held in reserves.
Mikhail Kasyanov, the Russian prime minister, said during a trip to the US that his country planned to expand its share of global oil exports, and would reduce any constraints over the next 18 months.