Adedapo Adesanya
By Adedapo Adesanya
Nigeria will experience a 43.2 percent drop in crude sales as oil demand is expected to shift from highly industrialized economies to India and China leading to the growth in oil consumption till 2040.
To avoid this, Nigeria may need to retain India, its largest destination, as one of its clienteles if it is to remain fiscally viable and grow its economy in the short-term.
The world’s second most populous nation became Nigeria’s biggest exporter replacing the United States in 2013 after high crude demand saw it turn its attention to shale production.
This development followed the release of its 2019 World Oil Outlook (WOO), Organisation of the Petroleum Exporting Countries (OPEC) revealed this in its annual report released on Tuesday in Vienna, Austria.
The oil producers’ cartel said that the last 12 months had been challenging for energy markets as global tension from the US-China trade war, rising supply, and dwindling demand for oil.
The report stated that developing and emerging economies would play a huge role in the oil market outlook, with that India through its growing middle-class consumers will need an additional 5.4 million barrels per day to its current usage while China will increase its current quota by 4.4 million barrels.
“India is projected to be the country with the fastest oil demand growth and the largest additional demand,’’ the report stated.
Further, North America, Western Europe, Japan, South Korea and Oceania will consume 9.6 million barrels per day less according to the long term forecast.
Secretary-General of OPEC, Mr Mohammad Barkindo, said its own production of crude oil and other liquids is expected to decline over the next five years, falling to 32.8 million barrels in 2024 from 35 million barrels per day on record in 2019.
The 14 nations group also hopes that the its members will experience a declining demand for their crude oil products until around 2025 when US crude oil output is envisioned to start falling.
“We have already started seeing a deceleration of growth in the United States. The shale patch in the U.S. is facing a tremendous amount of headwinds as a result of the unprecedented growth that we have seen in the last couple of years,” Mr Barkindo said.
OPEC expects supply from non-OPEC producers to hit a high of 72.6 million barrels per day in 2026 and fall to 66.4 million barrels per day by 2040.
“In the long term, it is OPEC that will be expected to meet the majority of oil demand requirements,” Mr Barkindo said.
As at the time of this report, Brent crude was trading 19 cents down at $62.77 per barrel and the West Texas Intermediate (WTI) was trading up by 8 cents at $57.31 after recording earlier drops on Wednesday morning.
