“Only weeks after the biggest oil-producing nations agreed to reduce output to avoid a global price war, Russia may be increasing its oil exports, a move that could put it on a collision course with the Organization of Petroleum Exporting Countries,” writes Bhushan Bahree and Thaddeus Herrick in today’s The Wall Street Journal.

“The new data come as Russian President Vladimir Putin reaffirmed in an interview that Russia intends to set its own course in world oil markets. Moscow will cooperate with OPEC to stabilize prices, Mr. Putin said, but the country intends to “preserve our independence to carry out our own policies.” Russia, he added, would like to see oil prices of $20 to $25 a barrel; OPEC has hoped for U.S. prices of $25 to $30 a barrel. Russia is the world’s second largest oil producer, after OPEC member Saudi Arabia, and isn’t a member of the cartel.”

“World oil prices have stabilized in recent weeks in a range of $18 to $20, down sharply from about $30 a barrel in the aftermath of the Sept. 11 terrorist attacks in the U.S. Lower prices, while crimping revenue of oil-producing nations, are helpful to oil consumers, including the U.S., Europe and Japan, which are seeking to revive their economies.”

“According to International Energy Agency data released Friday, Russia’s oil production rose by 60,000 barrels a day in January from December to an average of 7.26 million barrels a day. The data also show that exports of crude oil and refined oil products from the former Soviet Union, of which Russia is by far the biggest player, rose by 760,000 barrels a day to 4.92 million barrels. The Paris agency, which represents 25 of the world’s largest economies, couldn’t break down Russia’s export data from those of other former Soviet republics, such as Kazakstan, because they share pipelines and ports.”

“The increases were despite a pledge given by Russia in December to reduce shipments in the first quarter of this year as part of a coordinated move by OPEC and non-OPEC nations to prop up oil prices in the face of slowing growth in world energy demand. Russia’s pledge was instrumental to OPEC members agreeing to cut their own exports.”

“Initial readings suggest that Russia is having a difficult time managing its reductions,” said Klaus Rehaag, editor of the IEA’s monthly Oil Market Report.

“Moreover, Russian government officials have been urging the country’s oil companies to prepare for a bigger role in world oil markets. Russian Oil Minister Igor Yusufov recently was quoted by the ITAR-Tass and Interfax news agencies as telling a conference in Moscow that “Russian oil companies should strengthen their positions in international markets and not give them up to anyone.” Mr. Yusufov also said Russian companies should be ready to supply as much crude oil as possible to world markets this year, indicating that any restraints on oil exports would be short-lived.”

“Russia promised to reduce its oil exports by 150,000 barrels a day in the first quarter, based on its average exports during last year’s third quarter. The latest IEA data show that in crude-oil exports alone the republics of the former Soviet Union averaged 3.74 million barrels a day in January, up from 3.52 million barrels a day in the third quarter of 2001. Some of that, however, may reflect oil that wasn’t able to be exported during harsh weather in December.”

“Simon Kukes, president of Tyumen Oil Co., one of Russia’s largest oil companies, said Russia is complying with the promised cuts in crude-oil exports. “There is no cheating there, but refined [oil product] exports are going up” and will increase further in February, Mr. Kukes said. Refined exports include such products as gasoline and heating oil.”

Others were less certain about the numbers. “There are differences of opinion among data collectors,” said Lawrence Goldstein, president of the Petroleum Industry Research Foundation in New York. “It’s too early to know what the truth is.”

“Even Mr. Rehaag of the IEA notes that members of OPEC and others had little time to meet their promises of reduced output that were agreed at an ministerial meeting of the cartel on Dec. 28. “You’ve got to give the producers some more time,” he said, noting that even members of the cartel cut their output by only 640,000 barrels a day in January, or less than half the 1.5 million barrels a day they promised to cut.”

@page_break@”The issue is likely to come to a head at next month’s OPEC meeting in Vienna. The IEA has estimated that world oil supplies will rise by one million barrels a day this year, outstripping the expected 500,000-barrel increase in demand. The cartel already has about seven million barrels in idle production capacity, and it hopes Russia will deliver on its promised production cuts and agree to extend them. Several OPEC ministers are irritated that Russia last year boosted exports even as OPEC cut supplies to support prices.”

“Adnan A. Shihab-Eldin, OPEC’s chief economist, said organization officials will be paying close attention to Russia’s oil-export numbers in hopes that they will be nearer the target by March.”

“If not, OPEC ministers may have to consider whether they really want a painful price war that could hurt the cartel and others who cut back, including Norway and Mexico, more than it hurts Russia.”