Emmanuel Addeh in Abuja

The Organisation of Petroleum Exporting Countries and its allies (OPEC) yesterday gave the go-ahead to eight of its members and allies, excluding Nigeria, to pump an additional 548,000 barrels per day starting in August.
 The increase, which is equivalent to roughly 0.5 per cent of global production, is a step up from recent months when the group announced increases of 411,000 barrels a day.

Also at the weekend, Barclays said it raised its Brent oil price forecast by $6 to $72 per barrel for 2025 and by $10 to $70 a barrel for 2026 on the back of an improved outlook for demand.
The OPEC group, which pumps about half of the world’s crude oil, has been curtailing production since 2022 to support the market.

But it has reversed course this year to regain market share, amid growing supplies from rival producers like the United States.
 The eight members that had their quotas raised include: Saudi Arabia, Russia, the UAE, Kuwait, Oman, Iraq, Kazakhstan and Algeria. The eight started to unwind their most recent layer of cuts of 2.2 million bpd in April.
 But Nigeria was excluded by the cartel as it continues to struggle to raise its crude oil production despite ambitious projections and government incentives.

 The country continues to grapple with a complex web of structural, security, and investment-related challenges that have kept production well below capacity.
 As of May 2025, daily output hovered between 1.45 million bpd (oil alone) and 1.65 bpd, including condensate, far short of the 2.06 million bpd benchmark projected in the national budget for the year.

 Aside from lack of investments, one of the most pressing issues is the dilapidated state of oil infrastructure. Many of the pipelines and terminals, some dating back decades, are plagued by leaks, corrosion, frequent breakdowns, and vandalism, in addition to oil theft in the Niger Delta.  
 The Minister of State, Petroleum (Oil), Heineken Lokpobiri, told a gathering of oil sector players in Abuja last week that he was surprised that despite all the incentives, including executive orders by President Bola Tinubu, crude growth remained stunted.

 However, OPEC+ cited a steady global economic outlook and healthy market fundamentals, including low oil inventories, as reasons for releasing more oil.
 With the August increase, OPEC+ will have released 1.918 million bpd since April, which leaves just 280,000 bpd to be released from the 2.2 million bpd cut. On top of that, OPEC+ allowed the UAE to increase output by 300,000 bpd. The group still has in place other layers of cuts amounting to 3.66 million bpd.

But analysts insist that these production increases are likely to contribute to a market in which supply outstrips demand in the second half of the year, potentially lowering prices.
Meanwhile, Barclays has said it raised its Brent oil price forecast by $6 to $72 per barrel for 2025 and by $10 to $70 a barrel for 2026 on an improved outlook for demand.

 “Geopolitical tensions have eased as the US-mediated ceasefire between Israel and Iran continues to hold and the risk premium has evaporated, but price action has been reflecting better-than-expected fundamentals, in our view,” said Barclays in a note.