Nigeria, Iraq, Three Others Record Increase In Crude Oil Production

The total crude oil production of the Organisation of Petroleum Exporting Countries, OPEC, averaged 24.85mb/d in February 2021, down by 0.65 million bpd month-on-month.

Despite the drop in total production volume, analysis showed that five countries recorded increase in crude oil production.

According to the OPEC monthly report, crude oil output increased mainly in Nigeria, Iraq, Iran, Venezuela and Libya, while production decreased primarily in Saudi Arabia and Angola.

Nigeria produced a total of 1.42mb/d, up from 1.36mb/d recorded in January 2021, which is still within the expected production limit set by OPEC.

Recall that OPEC+, consisting of members of OPEC and their allies in non-OPEC, in the past months had voluntarily reduced the level of daily oil production to promote market stability and boost crude oil prices.

OPEC and its oil-producing allies have also made a decision to maintain a production cut of 7.05mn barrels per day steady through the month of April 2021.

The cut was put in place by the cartel to shore-up crude oil prices following the plunge in crude oil demand due to the Covid-19 pandemic induced lockdown in 2020.

With the commitment to reduce production, Nigeria’s daily production is not expected to exceed 1.516 million barrels per day, which is about 313,000 barrels reduction from 1.829 million barrels per day capacity.

The report noted that with the impact of the COVID-19 pandemic, the need for members to continually maintain the agreed production cuts cannot be overemphasized.

It said, “This proactive stance turned out to be a very important element in supporting global economic growth, after an estimated drop in oil demand of 9.6 million bpd in 2020.

“Oil demand is forecast to recover in 2021, growing by 5.9 million bpd. However, this year’s demand growth will not be able to compensate for the major shortfall from 2020, as mobility is forecast to remain impaired throughout 2021.”

The report showed that India, which is one of Nigeria’s main export partners, has recorded crude imports decline for the third-consecutive month.