Nigeria exceeded the volume of crude oil it was allowed to produce between May 2020 and July 2020 by 111,000 barrels per day.
This information was revealed in the monthly supply cut compliance figures of the Organisation of the Petroleum Exporting Countries (OPEC).
This made Nigeria, the Africa’s largest producer of the commodity the second-highest laggard behind Iraq.
Nigeria, going by the deal it signed with OPEC+ to stabilise the oil market in late April 2020., was supposed to supply 1.412 million barrels per day from May to July, but in May, it supplied 1.584 million barrels per day.
However, in June, its production slightly dropped to 1.497 million barrels per day, while in July, it further reduced to 1.488 million, the report from the oil cartel showed.
OPEC+ met on Wednesday to review compliance level, agreeing to maintain the current oil cuts. But Nigeria, Iraq, Angola and Kazakhstan have been asked to reduce their production this month and next to compensate for the overproduction from May-July.
“Based on the average projections of various institutions, including OPEC, EIA and the IEA, it is estimated that the world will reach about 97 per cent of pre-pandemic oil demand during the fourth quarter – which is a big recovery from the huge falls in April and May,” said Saudi Energy Minister Prince Abdulaziz bin Salman.
OPEC+ has eased output cut levels to 7.7 million barrels per day from August after implementing a record 10 per cent of global supply – between May and July 2020 – to balance supply with collapsing demand.
However, some countries such as Iraq, Nigeria, Angola and Kazakhstan still did not meet up with compliance and this was discussed at the virtual meeting.
Iraq exceeded by 283,000 barrels per day through the three months while Angola surpassed by 44,000 barrels per day.
OPEC alone traditionally produced well over 30 million barrels per day of oil over the past decades but after this year’s cuts, its output stood at 20-22 million barrels per day.
The countries within OPEC+ overproduced in May-July and would compensate those volumes in August-September, OPEC+ said in a statement without disclosing exact figures.
“It is very important to maintain full conformity,” said Russian Energy Minister Alexander Novak, who had tested positive for coronavirus and joined the virtual meeting from home.
“We should endeavour to put this temporary compensation regime behind us, by clearing all the past over-production by end of September,” said Prince Abdulaziz.
The next OPEC+ ministerial panel is scheduled for Thursday, September 17.
The price of OPEC basket of 13 crudes stood at $45.19 a barrel on Wednesday, August 19, 2020, compared with $45.49 the previous day, according to OPEC Secretariat calculations released today.
The OPEC Reference Basket of Crudes is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
