The policy that has propelled the Nigerian economy upward since January 2017 might be maintained, as Saudi Arabia is considering a compromise to keep OPEC production.
Saudi, who had partnered with Russia to call for a 1.55 million bpd output increase, now say they understand that it might be unfair to opt its volume to cover for the restricted production level of other countries.
Its Energy Minister, Khalid Al-Falih, had earlier said a million barrels in production increase was a good target to work with, ahead of anticipated heightening of demand in the second half of the year. As an indication of its shifting stance, Falih said permiting others to fill up the spaces left by countries with restricted production capacity “may be a technical solution but it may not be politically acceptable to others".
Iran, who was in favour of an output increase in order to benefit from the lifting of sanctions imposed due to its euranium enrichment programme, now want to keep cuts. The change in policy by the country is down to Trump’s reversal of the 2015 agreement. Iraq and Venezuela are in sync with the Persian nation for reasons of their own. The South American country are facing bans and diplomatic freezes from the US and its allies, while Iraq has production issues.
Russia led 10 other countries to form an alliance with the Organisation of Petroleum Exporting Countries (OPEC), who came together to create an alliance called OPEC Plus. The kingdom and Russia are in favour of a 1.55 million barrels per day (BPD) output increase. Russia has the capacity to produce up to 11 million bpd, while Saudi stepped down its production levels to just below 10 million in March. However, it exports below seven million barrels daily.
AFP quotes analysts as saying the participating countries could simply agree to stop exceeding their quotas for cutbacks, and stick to the agreed target of trimming production by 1.8 million barrels per day (bpd).
Nigeria, on the other hand, are mum about what stance it would take. Its Minister of State for Petroleum Resources, Ibe Kachikwu, says several options remain on the table.
The country is, however, facing stiff competition in selling its crude oil, with refineries preferring shale oil from America. The West African nation also has difficulties maintaining production levels at its desired 2 million bracket. OPEC Plus are currently holding back two million barrels of the market daily.