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Nigeria’s oil production drops to 900K barrels per day in August

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The Organization of the Petroleum Exporting Countries’ recently issued Monthly Oil Market Report for September revealed that Nigeria’s crude oil output dropped to 900,000 barrels per day (b/d) in September. As a result, the country’s crude oil revenues have continued to decline.

According to statistics provided by direct sources, Nigeria’s crude oil production decreased from 1 million barrels per day in July to 900,000 barrels per day in August, according to the OPEC report.

In addition, the price of the nation’s premium crude, Bonny Light, fell by 10% in a single month (July-August). Bonny Light’s price, which was $117 per barrel at the time of sale, fell to $106 per barrel in August.

However, the price of Bonny Light increased by 64% between August 2021 and 2022, resulting in a considerable year-over-year increase in the nation’s crude oil revenues.

The report states that Bonny Light cost $67 per barrel as of 2021. But in August 2022, this price rose to $110 per barrel.
Nigerian refiners produce the light-sweet crude oil grade known as Bonny Light. It serves as a crucial benchmark for all petroleum output in West Africa and is typical $1 or more expensive than Brent, the benchmark international crude.

Nigeria last registered a 1.4 million barrels per day of crude oil output in 2020, although production has been steadily declining for some time.

Production eventually decreased, even more, reaching 1.2 million barrels per day in the first quarter of this year and 1.3 million barrels per day at the start of 2021.

Oil production also moderated to 1.1 million barrels per day as of the second quarter of this year, 1 million barrels per day in July, and 900,000 barrels per day in December.

Nigeria’s low output puts its profitability in danger because the nation hasn’t been able to fully capitalize on the increase in demand for OPEC crude despite the demand for the commodity continuing to climb.

In a late-month interview, the Group Chief Executive Officer of Nigerian National Petroleum Corporation Limited, Mele Kyari, attributed the nation’s low crude oil production to theft brought on by pipeline vandalism in the Niger Delta. He claimed that 295 illicit connections had been discovered near the pipeline, which caused the output to stop.

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