A Reuters survey on crude oil production in May has revealed that Nigeria’s average crude oil production increased by 50 thousand barrels.
Besides Nigeria, Iraq also increased its production output by 50 thousand with a marginal increase from oil powerhouse, Saudi Arabia but Algeria produced below its quota for the month.
Despite Iraq’s pledge to reduce production, the country, the second-largest producer in OPEC, saw an increase in output. This rise occurred despite commitments from Iraq and OPEC+ member Kazakhstan to offset earlier overproduction by implementing further cutbacks throughout 2024.
According to the survey based on shipping data and industry sources, the Organization of the Petroleum Exporting Countries (OPEC) increased its output to 26.63 million barrels per day (bpd) last month. This marked a rise of 145,000 bpd compared to April.
The survey indicated that OPEC surpassed its implied target by approximately 250,000 bpd for the nine members bound by supply cut agreements. Iraq was responsible for the majority of this surplus production.
Countries exempt from output reductions, such as Iran and Venezuela, also experienced slight increases in output. Iran’s production levels are nearing a five-year peak achieved in November, despite facing U.S. sanctions, with one of OPEC’s most significant output expansions occurring in 2023.
OPEC’s production cuts
In January, various members of OPEC+, a coalition comprising OPEC, Russia, and other allies, implemented fresh cuts in response to economic fragility and heightened supply from non-member sources.
At the most recent meeting of the JMMC on Sunday, producers opted to maintain these cuts for the third quarter, following an earlier extension until June and set production quota for 2025 among other resolutions.
Recent Crude oil production in Nigeria
Nigeria’s designated production quota has remained steady since November of the previous year when the cartel convened to establish production levels for 2024.
Within that timeframe, Nigeria’s proposed production quota rose from 1.38 million barrels per day to its current level.
The set production quota of 1.5 million barrels per day falls far below the daily production target of 1.78 million barrels outlined in the 2024 budget, prompting concerns regarding budget execution.
To achieve the target $1 trillion economy, President Bola Tinubu has set a target to increase production to 4 million barrels of oil per day.
Crude oil production in Nigeria has increased marginally in the last one year but has failed to reach the highs of 2 million barrels produced around 2019.
Factors responsible for this include; insecurity and oil theft in the Niger Delta, low investment in oil exploration, and maturing oil fields amongst others.