Oil Price Rises, As Nigeria’s Failure To Meet Quota Drags OPEC Output Down

Despite Nigeria claiming the spot of the largest crude oil producer in Africa, it failed to meet its quota in January 2023, as agreed with members of Organisation of the Petroleum Exporting Countries (OPEC).

On the back of the report that OPEC’s output fell below expectation in January, Brent crude price touched $86.05 on Wednesday, 1, February, 2023, while filing this report.

Prime Business Africa gathered that crude oil price was hovering around $85.91 per barrel at the end of December last year – this means the price rose slightly by 0.16 per cent on Wednesday afternoon when both prices are compared.

Prior to the hike, Reuters had reported on Tuesday that OPEC’s crude output was 28.87 million barrels per day (bpd) in January, recording a shortfall of 50,000 bpd when compared to December figure. 

One of the major factors that contributed to a decline in OPEC’s output was Nigeria’s inability to meet its 1.6 million barrels per day for the first quarter. 

In December 2022, Nigeria had pumped about 1.235 million barrels per day. It went ahead to post similar output in January, against the quota of 1.6 million barrels. 

The gap between Nigeria’s output and the quota is due to the country not having the capacity to pump as much crude, coupled with its struggle with oil vandals and oil theft. 

According to the Chief Upstream Investment Officer at the NNPC Upstream Investment Management Services (NUIMS), Bala Wunti, Nigeria loses 700,00 barrels of crude oil per day to oil theft. 

Between 2009 to 2020, the Nigeria Extractive Industries Transparency Initiative (NEITI) said the country lost 619.7 million barrels of crude oil. 

Nigeria’s continued failure to meet OPEC’s quota means the country will further be exempted from the cut agreement, as Africa’s largest producer is owing the oil body barrels it has not fulfilled. 

Aside from Nigeria, the decline in Iraqi export and Iran output, as well as Angola’s lack of capacity to pump the expected quota also contributed to the fall in OPEC’s output.

Fakoyejo Olalekan

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