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Oil Theft: Nigeria Loses One Million Barrels of Crude Daily

The Nigerian Senate had said Nigeria was losing an average of 1 million barrels of crude oil per day

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Following a series of oil theft that has impeded Nigerian oil revenue and plunged crude oil production below 1 million barrels a day, the Nigerian Senate had said Nigeria was losing an average of 1 million barrels of crude oil per day.

Speaking at the presentation of the 2023 budget proposal at the National Assembly, Abuja, on Friday, the Senate President, Ahmad Lawan, who made the disclosure, warned that it is high time the government institute drastic measures against these oil criminals and national saboteurs.

“It is time to take drastic and desperate measures against the thieves,” Lawan declared. “The situation has worsened. Recently, the loss of our oil has reached one million barrels per day. Translated into monetary terms, our loss is monumental.

“The figures show we are not able to meet the Organization of Petroleum Exporting Countries (OPEC) daily quota of 1.8 million barrels per day.”

Weeks after losing its status as Africa’s biggest crude oil producer to Angola, the country’s oil production dropped greatly against Libya in August, according to OPEC’s recent report.

Explaining the damage being done to the nation, the Senate President said oil theft, especially in a developing country like Nigeria, is a source of major concern. Lawan said certain people are hell-bent on ruining the economy and should be seen as the country’s worst enemy.

He said, “I consider oil thieves the worst enemies of our country. The thieves have declared war on our country and our people.

“I strongly feel that if we do not take the necessary measures to stop the thieves immediately, our economy will be devastated, as efforts to provide infrastructure and diversification of the economy would both be thwarted.”

Therefore, the senate president stated that it is time for the Federal Government to take drastic measures against the country’s enemies as their activities are hurting government revenue needed for major developmental projects.

He said Nigeria’s plan to diversify from oil and gas into agriculture, mining, and manufacturing seems to be under serious threat.

The unrepentant attitude of the oil thieves has resulted in a huge deficit for the country and in order to increase revenue and reduce deficit, the Federal Government has to put plans in motion to stop oil theft.

Speaking on the issue of revenue deficit, Lawan said, “Your Excellency, we can reduce the deficit by stopping the theft. We can also consider other options to source more revenues for the government.”.

He asked the government to review waivers and to consider cutting off some major revenue generating agencies from direct funding by placing them on cost of collection of revenues, as it did for the Federal Inland Revenue Service (FIRS), Nigeria Customs Service.

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Oil Prices Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

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Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

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Brent Crude Approaches $86 Following Moscow Attacks

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Brent crude oil - Investors King

Amid escalating geopolitical tensions following the devastating terrorist attacks in Moscow, global oil markets rose with Brent crude oil hitting a $86 price level.

The tragic events in the Russian capital, which claimed the lives of over 130 innocent civilians, sent shockwaves through international communities and rattled energy markets already grappling with supply uncertainties.

Speculation surrounding the attacks, claimed by the Islamic State but with hints of potential Ukrainian involvement from Russian President Vladimir Putin, intensified concerns about potential disruptions to oil supplies.

Also, ongoing drone strikes by Ukraine targeting Russian infrastructure further exacerbated worries about the stability of crude oil production and refining capabilities in the region.

The mounting geopolitical unrest in key oil-producing regions has injected a sense of urgency into the market, with investors closely monitoring developments for potential impacts on global supply and demand dynamics.

Despite recent fluctuations, crude oil is poised for a third consecutive monthly gain, buoyed by efforts from the OPEC+ alliance to maintain production cuts and bolstered by tightening US sanctions on Russian energy exports.

The bullish sentiment is further supported by positive commentary on the broader commodities outlook, with central banks signaling potential interest rate reductions to stimulate economic growth, thus underpinning industrial and consumer demand for raw materials.

Analysts remain cautiously optimistic about the trajectory of oil prices, citing a delicate balance between supply risks and supportive macroeconomic factors amidst the backdrop of geopolitical turmoil.

As Brent crude inches closer to the $86 threshold, market participants brace for continued volatility amid unfolding geopolitical developments.

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Indian Refiners Shun Russian Crude Carried by Sovcomflot Tankers Amidst US Sanctions

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Indian refiners have taken a bold stance by refusing to accept Russian crude oil carried on PJSC Sovcomflot tankers, citing stringent US sanctions.

This decision marks a significant shift in India’s energy strategy and underscores the profound impact of global politics on the oil trade.

The move comes in the wake of heightened scrutiny on Sovcomflot tankers following sanctions imposed by the US Treasury’s Office of Foreign Assets Control.

Designating Sovcomflot and identifying specific crude oil tankers, the US has intensified its efforts to clamp down on entities linked to Russia, particularly in the aftermath of the Ukraine invasion.

Indian Oil Corp., Bharat Petroleum Corp., Hindustan Petroleum Corp., Mangalore Refinery & Petrochemicals Ltd., and Nayara Energy Ltd. have all halted the acceptance of cargoes carried on Sovcomflot vessels.

This unified action underscores the severity of the situation, with refiners diligently scrutinizing tanker ownership to ensure compliance with sanctions.

The repercussions of this decision are reverberating throughout the oil market, leading to disruptions in the supply chain and altering trade dynamics.

With fewer tankers available to transport Russian crude, the pricing landscape has undergone a significant shift, with discounts narrowing to compensate for higher freight costs.

Despite the challenges posed by sanctions and supply chain disruptions, India remains a key player in the global oil market.

However, the decision to shun Russian crude on Sovcomflot tankers reflects a strategic recalibration in response to evolving geopolitical realities, underscoring the complex interplay between politics and energy security on the world stage.

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