Nigeria’s Crude Oil Output Falls in the month of July 2023
In its monthly oil market report for August 2023, the Organization of Petroleum Exporting Countries (OPEC) announced that Nigeria’s oil output declined by 13.6% to 1.08 million barrels per day (mb/d) in July 2023. This represents a 0.16 mb/d reduction from the 1.25 mb/d produced in June 2023.
This suggests that the country is still running below capacity, i.e., below the existing OPEC limit of 1.7 mb/d. Furthermore, this is below the 2023 budget target of 1.69 mb/d, which is cause for concern given OPEC’s decision to reduce Nigeria’s crude oil production limit to 1.38 mb/d beginning in January 2024.
Nigeria must raise its crude oil production for the rest of the year in order to increase export earnings from the market, especially since demand is likely to climb due to geopolitical uncertainty in Europe. Strengthening the sector’s security networks can aid in tracking and reducing leaks caused by bunkering, vandalism, and other illicit activities that limit crude oil production capacity. Transparency in the industry is critical for reducing under-reporting of actual outputs.
Transparency in the industry is critical for reducing under-reporting of actual outputs. To solve further concerns, the government can use public-private partnerships to increase production through sector investments and replace and repair aging infrastructure. Increased industry output is advantageous because it can assist the country in meeting its goals of increasing revenues, increasing foreign reserves, and reducing current fiscal deficits.
