MOSCOW (AP) A pledge from Russia to reduce its daily oil production by less than 1 percent disappointed the world’s other leading petroleum producers, which had hoped for a cut three times as large to help stabilize falling prices.
The government of the world’s second-largest oil-producing nation said yesterday that companies would trim output by 50,000 barrels a day for the remainder of the year. The Organization of the Petroleum Exporting Countries (OPEC) has implored Russia to join other nonmember nations, such as Mexico and Norway, in making larger cuts to help shore up prices, which have plummeted nearly 30 percent in the past two months.
Russian Deputy Prime Minister Viktor Khristenko made the announcement after a meeting with the leaders of the largest Russian oil companies. He said a decision on further production plans for 2002 would be made in December.
The less-than-desired cut sent the price of Brent crude down 62 cents to $19.28 per barrel on the International Petroleum Exchange in London.
Russia’s flourishing petroleum industry has been one of the main stimulants of the country’s economic recovery. Oil barons are loath to give up market share even as profit margins fall and the government is reluctant to lose valuable tax revenues, fearing it may have to revise budget projections for 2002.
Oil prices have fallen sharply since the September 11 terrorist attacks as worldwide demand slumped and Russia’s refusal to make big cuts has irritated OPEC members and nonmember nations that are dependent on the industry.
An OPEC official, speaking on the condition of anonymity, called the planned cut too small.
Norway already has agreed to reduce production by 100,000 to 200,000 barrels a day, while Mexico has promised to cut its production by 100,000 barrels a day.