A 3D-printed oil pump jack is seen in front of a displayed OPEC logo in this illustration picture, April 14, 2020. (Reuters)

Citing economic challenges, such as inflation, interest rate increases, and uncertainty that surrounds global oil market outlooks, the OPEC+ alliance of petroleum-exporting countries decided to significantly reduce its oil production in an attempt to boost prices.

In a report on Wednesday, the International Energy Agency announced that the alliance failed to ensure the oil production growth needed under January's cut deal.

"Production from the 19 members bound by quotas dropped by 170 kb/d to 38.18 mb/d in January – widening the gap between the coalition’s supply and official targets to 1.9 [1.93] mb/d versus 1.8 mb/d in December. Russia, because of sanctions, trails the farthest below quotas, while Nigeria, Angola and Malaysia are lagging due to capacity constraints and operational issues," the report read.

Washington, at the time, expressed its disappointment by what it dubbed a "short-sighted decision", claiming that the blame falls upon Putin and the war in Ukraine, even though the alliance is made up of 19 countries whose majority supported the production decision.

The decision taken is said to help alliance member Russia who reduced natural gas supplies, which Western countries call a retaliation for supporting Ukraine in its war and imposing sanctions on it.

"We are going through a period of diverse uncertainties, which could come our way, it’s a brewing cloud,” bin Salman said back then, adding that OPEC+ sought to remain “ahead of the curve.”

IEA expects global oil production to reach 101.1 million barrels per day and for global output to grow by 1.2 mb/d in the year 2023.

With this expected increase, the total oil and petroleum products reserves in the Organization for Economic Co-operation and Development (OECD) countries still fell well below expectations, hitting their lowest value since 2004.

IEA's report also stated that commercial reserves decreased by 18.1 million barrels in December, to 2.767 billion barrels.

"OECD industry stocks fell by 18.1 mb in December to 2 767 mb, 95.7 mb below the five-year average," the report read.