Brent crude surged to $83 per barrel in anticipation of the Organization of Petroleum Exporting Countries (OPEC) meeting scheduled for today.
As of 7:47 AM GMT+1 on Thursday, November 30, global oil prices reflected Brent crude trading at $83.60, marking a significant milestone in its value. This climb in prices comes as OPEC members prepare for the postponed meeting, delayed due to certain African oil producers requesting higher oil production baselines. These producers were given a choice: adhere to reduced production quotas or demonstrate increased production capacity by a specified deadline set for November 2023.
Despite efforts to showcase improved production capabilities, African OPEC members are still facing substantial cuts in their production allocations, leading to disputes and concerns about potential impacts on their oil industries’ investments. As of November 28, ongoing efforts were in place to persuade Angola and Nigeria to agree to the terms, with other African countries using regional connections to mediate. However, as of November 29, a consensus agreement had not yet been reached.
Throughout 2023, Nigeria faced challenges in meeting its OPEC production quota of 1.78 million barrels per day. Nevertheless, in September and October 2023, Nigeria achieved a production level of 1.5 million barrels per day, marking its highest production for the year, including condensates.
Amena Bakr, the chief OPEC correspondent, highlighted that three online meetings are scheduled for today: an OPEC meeting, followed by the Joint Ministerial Monitoring Committee (JMMC), and finally, the OPEC-plus meeting, where a final decision is anticipated. The OPEC meeting is set to take place at 3 PM GMT.
In the Nigerian context, despite not meeting its oil production quota in 2023, Nigeria has been actively working to increase production by engaging with potential and existing upstream investors. Additionally, the country has been addressing crude oil theft, with 35 suspects arrested in the past week alone, and promptly resolving disputes in host communities.
Looking ahead to 2024, the federal government has set a crude oil price benchmark of $77.96 for the upcoming budget, coupled with an exchange rate of N750 to a dollar. Dr. Ayodele Oni, a Partner at Bloomfeld Law Practice, emphasized during a November 29 interview with Channels Television that this benchmark reflects current global geopolitical factors influencing oil prices.
Discussing Nigeria’s ability to tackle significant deficits in 2024, Dr. Oni highlighted the potential of the oil and gas sub-sectors, particularly through the Decade of Gas initiative. He stressed the importance of the government implementing the right policies to effectively leverage these sectors.