Adedapo Adesanya
By Adedapo Adesanya
Nigeria met only 19 percent of its promised reduction in line with the Organisation of the Petroleum Exporting Countries (OPEC) agreed cuts for the month of May 2020.
OPEC oil output hit the lowest in two decades in May as Saudi Arabia and other members started to deliver a record supply cut. OPEC and its allies in April agreed to cut supply by a record 9.7 million bpd from May 1 in order to lift slump in demand and prices caused by the coronavirus crisis.
In a survey carried out by Reuters over the weekend, it was discovered that Nigeria, alongside Iraq, did not fully comply with their share of the reduction.
On average, the 13-member OPEC pumped 24.8 million barrels per day in the month of May, compared with 30.71 million barrels per day in April.
In the month of May, they delivered 4.48 million barrels per day of the pledged reduction, equal to 74 percent compliance, the survey found.
May’s output was the lowest by OPEC since 2002, excluding membership changes since then, the survey records show.
Providing a breakdown, the biggest drop in supply came from Saudi Arabia, which pumped a record 11.7 million barrels in April. Saudi’s supply is expected to drop even further in June after it agreed to cut one million barrels per day
The United Arab Emirates and Kuwait also cut back sharply, sources in the survey said. Both had also pumped at record rates in April.
The sharp cuts in May, however, are watered down by the fact that several OPEC members, including Kuwait, the UAE, and Saudi Arabia, produced record-high volumes in April, which flooded the market in the face of a demand plunge.
For May, Iraq reached just 38 percent compliance with its promised cuts, continuing a trend it also had in 2019.
Venezuela and Iran reduced output in May, while Libyan supply was steady. All three were exempt from voluntary cuts because of US sanctions or internal issues limiting production.
Iran is seeing a drop in fuel use because of the coronavirus outbreak, compounding the impact of sanctions on supply. Venezuela, contending with both US sanctions and a long-term decline in output, posted another drop in exports.
Oil output in Libya has plunged since January 18 due to a blockade of ports and fields by groups loyal to eastern-based commander, Khalifa Haftar. Production averaged 100,000 barrels per day in May, the survey found.
