Members of OPEC (the Organisation of the Petroleum Exporting Countries) and non-OPEC producer Russia are reportedly shielding Asia from supply cuts agreed in a landmark deal they made last year.

Instead, they have agreed to reduce deliveries to Europe and the Americas as they carry out a co-ordinated agreement to cut supply by about 1.8 million barrels per day (bpd), in order to reduce a global supply glut and raise oil prices.

Under the deal agreed in November, OPEC will cut production by around 1.2 million bpd in the first half of 2017, while other countries, including Russia, will cut production by 600,000 bpd.

Data from the Thomson Reuters Eikon group shows that OPEC oil supplies to Asia increased by 7% (to 17 million bpd) between November and the end of January, meeting two thirds of the region’s oil consumption.

Tushar Bansal, at Singapore-based consultancy Ivy Global Energy, said: “For OPEC, Asia is their core market. The last thing OPEC would want is that as they develop newer markets elsewhere, some other players achieve a larger market
share in what they see as their backyard.”

Meanwhile, Russia surpassed Saudi Arabia as China’s single biggest supplier last year, with 1.05 million bpd of crude versus Saudi Arabia’s 1.02 million bpd.