Data from the Organisation of Petroleum Exporting Countries (OPEC), in its Feb-2023 Monthly Oil Market Report, MOMR, revealed that Nigeria’s oil production (excluding condensates) rose by 1.6% m/m to 1.26mbpd in Jan-2023, from 1.24mb/d recorded in Dec-2022. The report further revealed that total OPEC-13 crude oil production averaged 28.88mbpd in Jan-2023, declining 0.2% m/m. Crude oil output increased mainly in Nigeria, Angola, and Kuwait, while production in Saudi Arabia, Iraq and Iran declined.

Nigeria’s crude oil production increase can be attributed mainly to the efforts by the Federal Government to curb the vandalism of and theft from oil pipelines, which saw average production levels increase from 1.00mbpd in Q3-2022 to 1.15mbpd in Q4-2022. However, it is essential to note that the current production levels are still below OPEC’s production quota of 1.74mbpd and below the budgeted average of 1.69mbpd. The negative variance between the actual production levels and the budgeted & OPEC quotas reinforces the revenue shortfalls by the nation and points towards further reliance on debt and a persisting weakened FX environment.

However, the silver lining for the nation is that crude oil prices have remained relatively stable. Bonny light crude prices rose 2.1% m/m in Jan-2023 to $82.36/barrel, and oil futures markets have maintained bullish sentiments. This trend is expected to continue in H1-2023 as OPEC estimates that global demand (201.9mbpd) will outpace supply (149.3mbpd). That said, there is still need to ramp up crude oil production, in bid to benefit from the current cycle of oil prices.