The crude against which Nigeria’s oil is priced, Brent, moved up in rate to $114/barrel as of 4.34 pm on Wednesday.
It rose by $3.72 or 3.37 per cent compared to the previous day’s cost.
The Organisation of Petroleum Exporting Countries (OPEC) raised the alarm that the crisis also cost the energy market more than seven million barrels of crude oil daily, following tbr ongoing conflict between Russia and Ukraine.
The Secretary-General, OPEC, Sanusi Barkindo, divulged this at the 61st meeting of the Joint Technical Committee of the organisation via videoconference. Nigeria is a strong member of OPEC.
He said, ‘Today, we are also confronting a war in Ukraine whose far-reaching consequences could reshape the geopolitical landscape and world order itself.
‘This conflict has also compounded the uncertainties related to the pandemic by stoking economic volatility and further elevating risk.’
‘Premiums for oil and other essential commodities, both Ukraine and the Russian federation are key global exporters, including essential agricultural goods.
‘The potential loss of more than seven mb/d (million barrels/day) of Russian oil and other liquids exports (around seven per cent of current global demand), either through sanctions or voluntary actions, is already having major repercussions on energy markets,’ he added.
Barkindo noted, “No matter how you crunch the numbers, there is simply no way to make up for a loss in volumes of this magnitude given the current demand outlook.”
He reported that the last major supply disruption of this size, 5.6 million barrels/day, occurred in 1978 and 1979 during the Iranian Revolution.
‘At that time, the spare production capacity was nine million barrels/day, nearly three times OPEC-10’s current levels of around 3.3 million barrels/day,’ he said.
The OPEC scribe expanded, ‘Other gross peak supply losses during the last six decades were within 1.5 to 4.3 mIllion barrels/day. During the Iran-Iraq war in 1980-1981, for instance, it reached 4.1 million barrels/day, and in 1990-1991, during the invasion of Kuwait, the loss amounted to 4.3 million barrels/day.’
Barkindo told the meeting that the leading international organisations and institutions came together in the early days of the COVID-19 pandemic to endorse efforts to stabilise the energy markets.
He said, “This high level of cooperation provided pivotal support to the collective efforts undertaken by our Declaration of Cooperation participating countries.
‘We urge global leaders to follow this example of multilateralism and ensure an unhindered, stable and secure flow of energy to the whole world.’
