The Organisation of Petroleum Exporting Countries (OPEC) on Thursday deferred the commencement of its proposed oil production cuts by a year, until the end of 2026, following current weak demand and rising output by non-members of the international oil cartel.
OPEC left Nigeria’s current production quota unchanged at 1.5 million barrels per day, with the country struggling for at least four years to meet its monthly allocation as prescribed by the now 12-member group after the exit of Angola last year.
But the oil producers’ organisation, which has cooperation from 10 other countries, collectively called OPEC+, had been planning to start unwinding cuts from October 2024, but had postponed the plans several times.
Aside Nigeria’s 1.5 million bpd quota, OPEC and its allies also agreed to Saudi Arabia’s 10.47 million bpd; Russia’s 9.94 million bpd allocation; Iraq’s 4.43 million bpd production and Algeria’s 1 million bpd output.
However, the Minister of State, Petroleum Resources (Oil), Senator Heineken Lokpobiri, who represented Nigeria at the virtual event, noted that Nigeria was on course to meeting the 2.06 million barrels per day crude oil and condensate production target in the 2025 proposed budget.
But despite the group’s supply cuts, global oil benchmark Brent crude has mostly stayed in a $70 to $80 per barrel range this year and on Thursday it traded near $72 a barrel, having hit a 2024 low below $69 in September.
At the 38th Joint Ministerial Monitoring Committee (JMMC) meeting, Lokpobiri, in a statement by his spokesperson, Nneamaka Okafor, stated that the decisions were taken to ensure oil market stability.
Beyond reaffirming the crude oil production adjustments agreed during the 35th OPEC ministerial meeting, which will remain in effect until December 31, 2026, the ministers emphasised the critical importance of full conformity with production levels and the implementation of a robust compensation mechanism to enhance transparency and preserve market equilibrium.
“For Nigeria, these resolutions provide a strategic pathway to achieving the nation’s 2025 production target of 2.06 million barrels per day, inclusive of condensates, as outlined in the draft 2025 appropriation bill, positioning the country to leverage its resources effectively while aligning with global market trends,” Lokpobiri said.
The head of the Nigerian delegation reiterated the country’s commitment to the Declaration of Cooperation (DoC) and emphasised the critical role of collaborative efforts in ensuring a balanced and sustainable oil market.
“This meeting reflects the unity and resolve of OPEC and its partners to maintain stability and ensure a balanced market. Nigeria remains steadfast in supporting these efforts while pursuing our national objectives within the global energy landscape,” Lokpobiri stated.
As it is, OPEC+ members are holding back 5.86 million barrels per day of output, or about 5.7 per cent of global demand, in a series of steps agreed since 2022 to support the market.
The steps include cuts of 2 million bpd by the whole group, 1.65 million bpd of first stage of voluntary cuts by eight members and another 2.2 million of second stage of voluntary cuts by the same eight members.
But on Thursday, OPEC+ agreed to extend the 2 million bpd and the 1.65 million bpd in cuts until the end of 2026 from the end of 2025, according to statements issued by the group.
OPEC+ also agreed to allow the United Arab Emirates to raise output by 300,000 bpd gradually from April until the end of September 2026, instead of the earlier plan to start it in January 2025.
The group reaffirmed the mandate of the JMMC to closely review global oil market conditions, oil production levels, and the level of conformity with the DoC, and hold the OPEC and non-OPEC ministerial meeting every six months.
The 39th OPEC and non-OPEC ministerial meeting is scheduled to be held on May 28, 2025.
OPEC and its partners had first announced in June that they would restore output halted since 2022, reviving 2.2 million barrels per day in monthly tranches. But its plans have been thwarted as oil demand faltered in top consumer China, coupled with a supply boom from the US, Brazil and Canada.
Oil prices have declined about 18 per cent since early July and Citigroup Inc as well as JPMorgan Chase & Co. have predicted that crude will keep sliding into the $60s next year, even if OPEC+ continues to hold back on production increase.
Emmanuel Addeh
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