Home Business OPEC Members Meet Thursday as Oil Prices Rise

OPEC Members Meet Thursday as Oil Prices Rise


Organization of Petroleum Exporting Countries (OPEC) members will meet on Thursday even as oil recovers in the international markets.

CNN reports that the meeting is coming as output and sale concerns grow among member countries.

For instance, Nigeria, which recently lost its Africa’s top oil producer status to Angola on the back of huge decline in its output, stands a chance of losing some of its traditional buyers to rival producers such as Iran and Saudi Arabia.

Following the spate of production disruptions largely caused by the recent upsurge in militant attacks on oil infrastructure in the Niger Delta that have cut Nigeria’s output to the lowest in almost three decades, exports of the commodity from the country have taken a serious beating.

The nation relies heavily on earnings from oil exports, and the production cuts come as an additional headache for an economy that is already suffering from the sharp drop in oil prices since 2014.

Currently, four of the nation’s five largest export streams have been totally suspended as Forcados, Qua Iboe, Bonny Light and Brass River are under force majeure – a legal clause that allows the exporters to stop shipments without breaching contracts.

All but that of Qua Iboe was as a result of militant attacks.

Also, Iran, which is engaged in a battle for market share in a bid to regain customers after years of curbed oil sales that crippled its economy, has ramped up its production and exports.

Saudi Arabia, the biggest producer in OPEC, does not look set to rein in production.

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had on May 16 put the drop in the nation’s oil output at 800,000 barrels per day following attacks and disruption of production in the Niger Delta.

With more disruptions seen since then, the nation’s output is said to have plunged by about 1.1 million bpd.

Iran is fulfilling its pledge to raise oil production and exports almost six months after western sanctions on the nation were lifted, surprising many analysts and commentators, the Financial Times reported last week.

Oilfields in the country pumped almost 3.6 million bpd in April, a level last reached in November 2011 before sanctions over its nuclear programme were tightened, said the International Energy Agency. Crude exports surged to two million bpd last month, just 200,000 bpd below late 2011 levels.

Iran was said to have shipped more crude oil to India, China and other countries it was permitted to sell to under sanctions. It has also re-established relationships with European buyers and secured new sales agreements with big international oil traders such as Vitol and Glencore, as well as energy majors such as Repsol of Spain.


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