Bleak Sentiment Presents Challenge for Opec-Plus

Opec-plus faces another tricky meeting on Jun. 4 as benchmark Brent struggles to stay above $70 per barrel despite the group's recent supply cuts. The market's expectation is that Opec-plus will stand pat and not make further production cuts beyond the headline 2 million b/d reduction announced last October and another 1.66 million b/d voluntary curb announced Apr. 2. Further cuts might prove challenging for some members to implement, and industry sources told Energy Intelligence that Russia has voiced a preference for keeping current policy unchanged — a view confirmed by Russian Deputy Prime Minister Alexander Novak. However, recent Opec-plus meetings have thrown up surprises. Moscow pledged on Apr. 2 to voluntarily cut 500,000 barrels per day starting in May — essentially formalizing a February forecast that its output would fall by that amount in response to Western sanctions and price caps. But Russian output fell by only around 300,000 b/d in April compared to February, according to Energy Intelligence data. Russian officials have since publicly stated that Russia would meet its target in May and honor its Opec-plus commitment. That contrasts with Moscow's stance in 2020 when it opposed new Opec-plus cuts, which led to a temporary collapse in producer dialogue and the start of a bruising price war.