Russia, the world's second largest oil exporter, said yesterday it would gradually reverse a cutback in oil exports despite pressure from OPEC, but analysts reacted calmly to the move saying Moscow had already flouted the restriction in practice anyway.
In a widely anticipated announcement, the Prime Minister Mr Mikhail Kasyanov said that Moscow would restore oil exports within two months to the level they were at before Russia bowed to pressure from the Organisation for Petroleum Exporting Countries to introduce restrictions on January 1st.
"The situation on oil world markets is almost stabilised and, in view of this, we think that time has come to gradually lift restrictions on our oil exports," Mr Kasyanov said.
The process would take effect gradually, he said, after holding talks with Russia's oil company bosses.
Moscow agreed to curb its oil exports by 150,000 barrels per day (bpd) from the start of 2002 to help OPEC prop up world prices, but since the end of the first quarter has been paying scant notice to the agreement.
Oil prices fell yesterday after Russia's announcement that it was reversing its decision, with reference Brent North Sea crude for June delivery falling 30 cents to $26.08 a barrel in London by late afternoon.
Russia exported 2.97 million bpd from January to March, according to the latest figures, which do not include deliveries to former Soviet republics.
Oil analysts said yesterday that Mr Kasyanov's announcement had merely put the official seal on an undeclared policy of ignoring the restrictions.
"Today's decision only confirms the current de-facto situation since Russia has not implemented restrictions since March," said Mr Stephen O'Sullivan, an oil analyst with the Moscow-based United Financial Group (UFG) brokerage.
This was borne out by the evolution of oil prices on the Russian domestic market, he added.
During the first two months of this year, Russia's home market was flooded with oil as a result of Moscow effectively reducing exports, and domestic prices went down sharply.
But starting in March, Russia all but ceased to implement the cuts and, as a result, domestic prices have soared.
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