Russia, which is not a member of OPEC but which did sign the deal to cut production, also
lowered its output in line with promises, according to the International Energy Agency.
That played havoc with the government budgets of major oil producers, pushing even Saudi Arabia — OPEC’s biggest member by oil output — to borrow large sums in financial markets
and to risk antagonizing its citizens by raising energy prices and cutting government salaries.
When OPEC and other major oil exporters agreed late last year to limit production as
a way to bolster teetering prices, many saw it as a shaky deal by a spent force.
The estimates released by OPEC on Monday showed that its members made more than 90
percent of the agreed cuts in January, the first month that the deal was in force.
“But the deal may unravel if those cuts are just offset by strong non-OPEC production
growth in places like the U. S., Canada and Brazil that keeps prices low
The United States, where production fell by 1 million barrels per day between April 2015 and September 2016, is now raising output again.
“Saudi Arabia and other producer countries are feeling the pain of low oil prices
and thus will likely stay the course if cuts prop up prices,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University.
Oil Producers Comply With OPEC Deal to Cut Output, but for How Long?