The price of Nigeria’s Bonny Light on Thursday dropped to $69.90 per barrel from more than $75 per barrel in the global market, indicating a decrease of 6.8 percent.
The development was fuelled by announcement of sweeping new tariffs by US President Donald Trump and the decision of the Organisation of Oil Producing Countries, also known as OPEC+ group, to increase its unwinding of output cuts in May 2025, expected to increase supply to the market.
However, this may likely affect Nigeria’s 2025 budget, which was based on oil production of 2.06 million bpd, $75 per barrel and revenue target of N36.35 trillion with 56 per cent coming from oil sales.
The Nigerian Upstream Petroleum Regulatory Commission, NUPRC, said crude oil output, including condensate, dropped month-on-month, MoM, by 3.8 per cent to 1.671 million barrels per day, bpd, in February 2025, from 1.737 million bpd in January 2025.
Meanwhile, OPEC said Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman have reaffirmed commitment to market stability on healthier oil market outlook and adjust production upward.
In a report released yesterday, the organisation stated: “The eight OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023, namely Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman met virtually on 3 April 2025, to review global market conditions and outlook.
“In view of the continuing healthy market fundamentals and the positive market outlook, and in accordance with the decision agreed upon on 5 December 2024, subsequently reaffirmed on 3 March 2025, to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from 1st of April 2025, the eight participating countries will implement a production adjustment of 411 thousand barrels per day, equivalent to three monthly increments, in May 2025.
“This comprises the increment originally planned for May in addition to two monthly increments. The gradual increases may be paused or reversed subject to evolving market conditions.
“This flexibility will allow the group to continue to support oil market stability. The eight OPEC+ countries also noted that this measure will provide an opportunity for the participating countries to accelerate their compensation.”
“The eight countries reaffirmed their commitment to the voluntary production adjustments agreed at the 53rd Joint Ministerial Monitoring Committee, JMMC meeting on 3 April 2024.”
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