As oil demand picks up, OPEC’s discipline will be tested

“THE DEMAND picture has shown clear signs of improvement.” So declared Abdulaziz bin Salman, the energy minister of Saudi Arabia, at a virtual gathering of the Organisation of the Petroleum Exporting Countries (OPEC) on June 1st. The cartel and its allies, chief among them Russia, have been squeezed badly by the covid-induced recession, which cut global demand for oil from nearly 100m barrels a day (bpd) in 2019 to 91m last year. In a frantic effort to prevent a price collapse, OPEC+, as the group calls itself, agreed to cut output in early 2020. Yet it failed to stop the price dipping below $20 a barrel (see chart).