When OPEC+ meets in person for the first time in more than two years on Wednesday, delegates predict that the group will discuss reducing oil output by more than 1 million barrels per day.
The producer group’s worry that the global economy is slowing down quickly in the face of quickly tightening monetary policy would be reflected in a larger-than-expected drop. The delegates stated that a final choice won’t be made until after the oil ministers gather in OPEC’s Vienna headquarters.
Nigeria’s oil output is experiencing a record decline, falling from the top producer in Africa to fourth, behind Angola, Algeria, and Libya.
According to the monthly oil market report, published by the OPEC for August, Nigeria’s production was 980,000 barrels per day, down more than 100,000 barrels per day from July.
Nigeria has been producing the most oil in Africa for many years. However, production has recently been impeded by theft and sabotage at manufacturing facilities. Authorities in the petroleum industry claim that as a result, more than 200,000 barrels are lost every day, costing the nation millions of dollars in revenue.
Following Russia invasion of Ukraine in February, the price of Brent crude rocketed beyond $125 per barrel. The stunning windfall enjoyed by Saudi Arabia, Russia, the United Arab Emirates, and other big countries has since decreased as a result.
Massive cuts run the risk of adding yet another shock to a world economy already struggling with energy-related inflation. President Joe Biden visited Saudi Arabia earlier this year in quest of a new oil agreement—and ultimately reduced pump prices for Americans ahead of the midterm elections in November; the US and other nations have urged for increased output.
As part of his efforts to undermine Vladimir Putin’s military strategy, Biden is also making an effort to limit the money Moscow receives from oil sales. The opposite result would likely occur with an OPEC+ cut.
The 23-nation OPEC+ alliance is supported by the friendship between Riyadh and Moscow, which has withstood Russia’s invasion of Ukraine and shows no indications of deterioration. The attendance of Alexander Novak, deputy prime minister and head of Russia’s oil industry, at the Vienna summit has not yet been confirmed. If he does, it will be uncomfortable for Ukraine’s supporters in the European Union and send a strong message.