- Nigeria Struggling to Comply With OPEC Quota, Scores 19% Compliance Level
Nigeria, Africa’s largest oil producer, continues to struggle with production cut in May, according to a recent report by Reuters.
The report shows the giant of Africa compliance level was just 19 percent of agreed cut despite promising to abide by the accord reached in early April when global oil prices plunged by over 61 percent.
Other nations like Iraq are also struggling to cut production due to weak oil prices and falling revenue generation needed to support the economy against the negative impacts of COVID-19.
OPEC and allies, popularly referred to as OPEc+, had agreed to cut oil production 9.7 million barrels per day starting from May 1. However, the group only managed to cut production by 5.91 million barrels per day or reached just 74 percent compliance level in the month of May.
Despite lack of compliance in May, production level stood at 24.77 million barrels per day, the lowest since 2002, according to a Reuters survey.
“OPEC has made a strong start in May with its latest production cut, lowering supply by 5 million bpd versus April,” Daniel Gerber, chief executive of Petro-Logistics, which assesses OPEC supply by tracking tanker shipments, told Reuters.
“However, compliance is far from perfect. With less than four weeks between the adoption and the start of the agreement, many countries had already committed volumes to buyers and have not managed to reduce supply to the agreed levels.”