Russia Ends Pledge to Support Export Cuts
Russia will gradually end cuts on oil exports over the next two months, the prime minister announced Friday, dismissing appeals from OPEC to keep a lid on exports to keep world prices buoyed. The move by the world's second-largest oil producer, reported by the Interfax and ITAR-Tass news agencies, had been largely expected. "We decided that the time has come to gradually lift restrictions on oil exports," Prime Minister Mikhail Kasyanov was quoted as saying during a meeting with executives from Russia's aggressive young oil companies. "In the next two months (Russia) will return to export volumes that existed before the export restrictions were agreed."
Russia had cut its oil exports since Jan. 1 by 150,000 barrels a day under heavy pressure from OPEC to help stabilize falling oil prices. In late March, Russia agreed to extend its agreement on oil export cuts into the second quarter. Tension in the Middle East has recently helped to push world prices to eight-month highs, and Russia's oil majors have been pressing to end the cuts before the end of the second quarter. The companies receive substantially more money from exports than from domestic users, who pay a lower price. In practice, Russia has offset the cuts by increasing exports of refined products and exporting more crude via third countries, especially ex-Soviet republics such as Belarus and Ukraine.