• Crude oil price jumps to six-month high on Israel, Iran tension
Emmanuel Addeh in Abuja
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) at the weekend confirmed the data from the Organisation of Petroleum Exporting Countries (OPEC), which showed a dip in Nigeria’s oil production for the second consecutive month this year.
Information on crude drilling operations for March from the NUPRC indicated that production fell from 1.42 million barrels per day in January to 1.32 million bpd in February, before slipping to 1.23 million bpd in March.
According to a THISDAY computation of the data, cumulatively, Nigeria may have lost as much as 2.8 million barrels in the entire month of March, that is roughly 90,000 bpd during the period under review.
The Minister of State, Petroleum Resources (Oil), Senator Heineken Lokpobiri, last Friday acknowledged the country’s declining crude oil production after an initial rise in recent months.
In a statement by his Special Adviser on Media and Communications, Nneamaka Okafor, the minister assured that measures were being taken to address the situation, not only to restore production to previous levels but to increase it sustainably.
Lokpobiri stated that the slump was primarily due to issues encountered on the Trans Niger Pipeline (TNP), coupled with maintenance activities carried out by some oil companies operating in Nigeria during the period.
However, the NUPRC data showed that aside from crude oil which experienced a decline, condensate, which is usually outside OPEC’s quota calculation, also fell in March.
Overall, when condensate production was added to oil output for the month, Nigeria steadily declined from 1.64 million bpd in January to 1.53 million bpd in February and further to 1.43 million bpd in March.
Apart from the reasons mentioned by the minister as being responsible for the two-month repeated decrease in production, oil theft and waning investments remain Nigeria’s biggest constraints to achieving its OPEC quota.
Last year, OPEC reviewed Nigeria’s production quota from over 1.7 million bpd to 1.5 million bpd for 2024, citing the country’s inability to consistently meet its allocated production targets.
Meanwhile, crude oil prices at the weekend jumped to the highest price since October as Israel braced for a possible attack from Iran, a development that would threaten major disruptions in a region that accounts for a third of the world’s crude output.
Nigeria’s lesser-than-expected production, it also means that it may miss this second wave of unusually high oil prices due to its inability to raise output considerably.
But an assault is expected to come as soon as this week from Iran’s axis, which would mark a significant widening of the conflict that started when Hamas attacked Israel in October.
Global benchmark Brent surged as much as 2.7 per cent to top $92 a barrel, a level last reached during the early days of the war. US benchmark West Texas Intermediate climbed as much as 3.1 per cent to surpass $87, Bloomberg reported.
Israel is expecting a drone or missile attack on government targets within days, either directly or from Iran’s proxies, people familiar with Western intelligence assessments said.
The move still hasn’t been approved by Tehran’s highest-ranking officials, the people said, while the US has moved additional military assets into the region.
Oil has surged about 19 per cent this year as the Middle East conflict bolsters a market shaped by supply restrictions and stronger-than-expected demand.
The escalating geopolitical tensions – also including attacks on Russian energy infrastructure by Ukraine – have spurred bullish activity in the oil options market.
