By Adedapo Adesanya
Nigeria, a member of the oil-producing countries under the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) led by Saudi Arabia and Russia, will increase its output for the next three months.
The country, which is Africa’s largest crude producing nation, will join the 23-nation alliance to boost supply by not more than 500,000 barrels per day in May, June and July 2021.
The decision comes amid expectations before the meeting that the bloc would err on the side of caution as fear over the third wave of COVID-19 pandemic spread across Europe.
On Thursday, April 1, members of the group had a meeting to discuss the market and how supply can be monitored.
Under its current agreement, the OPEC+ alliance is enforcing drastic cuts in production, meaning seven million barrels that could be shipped to markets every day are being left in the ground.
Market analysts had widely tipped OPEC+ to roll over the production cuts for another month, especially as more nations are experiencing an upswing in coronavirus cases.
Saudi Arabia and Russia Views
Addressing reporters after the meeting, Saudi Energy Minister Prince Abdelaziz bin Salman stressed that the decision could still be “tweaked” in the alliance’s monthly meetings.
Before the meeting, Prince Abdelaziz said that “the reality remains that the global picture is far from even, and the recovery is far from complete”.
Prince Salman praised the OPEC+ alliance nations for more than fulfilling their commitments to restrain output.
In addition, Saudi Arabia has volunteered to cut its own output by one million barrels per day to help avoid oversupplying a market suffering from a collapse in demand due to the coronavirus pandemic.
The cuts were aimed at avoiding limited storage capacity and to help support prices that crossed the $60 per barrel mark last month.
Russia’s Deputy Prime Minister, Mr Alexander Novak was more optimistic in his opening comments.
“The evolution of the vaccination campaign is making progress and allows us to look towards the future with optimism, even if, of course, we shouldn’t forget that there remain many uncertainties ahead.
“We also note that the economy continues to improve,” he added.
However, with Europe returning to lockdown and infections sweeping through India, a country that until the pandemic was an important source of demand growth, experts are now seeing a slower recovery for the crude market.
The International Energy Agency (IEA) reflected this more downbeat outlook in forecasts contained in its last report this month.
It estimated that global demand could take another two years to get back to its pre-crisis levels.
Latest OPEC+ Compliance for February 2021
Overall OPEC+ compliance stood at 113 per cent in February, up from 103 per cent in January, the highest compliance that the group has delivered since the start of the current output restraint agreement in May 2020.
The group’s 10 participating OPEC countries, including Nigeria and excluding Iran, Venezuela, and Libya, were 124 per cent compliant in February, also the highest level since the start of the agreement, up from 108 per cent in January, while the nine Non-OPEC participants were 94 per cent compliant, down from 95 per cent in the previous month.
Non-OPEC members’ collective compliance has hovered just a little below 100 per cent in each month since the start of the agreement. They got closest to full compliance in August when they delivered 99 per cent of their pledged cuts.
Dipo Olowookere