Oil output by Nigeria, a major OPEC member, dropped to an average of 1,268,202 bpd in March 2023 following a sustained production increase from September 2022 to February 2023. This decline was due to an explosion that rocked a crude oil tapping point in the country's south-south region.
Oil theft and illegal refining are not new in Nigeria's Niger Delta region, and the Defence Headquarters recently reported that troops had destroyed 50 illegal refining sites in the region in two weeks, as well as 22 wooden boats, 237 storage tanks, 204 ovens, and 30 dugout pits used for illegal oil bunkering. Last year, the Nigerian National Petroleum Corporation Limited (NNPC) detected an illegal connection on the Trans Escravos pipeline, looped to the four-kilometre Afremo test line.
However, on Friday, oil prices increased after the International Energy Agency (IEA) predicted that 2023 would see a record-high global demand due to a rebound in Chinese demand. Brent crude rose by 0.24% to $86.25 per barrel, while West Texas Intermediate crude (WTI) rose by 0.41% to $82.50.
The increase came after some members of the Organisation of Petroleum Exporting Countries and its allies announced a new voluntary production cut in addition to the two million barrels of oil per day output cut already in place. The IEA stated that the production cuts could worsen oil supply shortages and hurt global economic recovery, projecting that global oil supply would fall by 400,000 bpd by the end of the year.
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