Nigeria: Nigerian oil production softens in September
Latest reading: Brent crude oil prices averaged USD 67.61 per barrel in September, up 0.5% from August. On 30 September, the commodity traded at USD 67.08 per barrel, down 1.6% from 29 August, amid further OPEC+ hikes. Turning to production, Nigerian oil output ticked down to 1.52 million barrels per day (mbpd) in September, from August’s 1.54 mbpd. Still, output remained above Nigeria’s OPEC+ quota of 1.50 mbpd for a sixth consecutive month. In other news, the nation’s Dangote Petroleum Refinery—Africa’s largest— has announced it will ramp up output to meet national petrol and diesel demand after the government approved a new import tariff targeting fuel in a bid to protect recent multi-billion-dollar investments in domestic refining.
Outlook: Oil output is expected to rise from 2024 levels through 2029. This year, it is expected to reach its highest level since 2020 as rising capacity at the Dangote refinery will underpin crude demand in Nigeria, prompting an increase in production. Still, the country is expected to narrowly miss its OPEC+ quota of 1.50 mbpd due to a fragile security situation and an uncertain domestic regulatory environment. Nigeria is then seen exceeding its OPEC+ quota of 1.50 mbpd throughout the rest of our forecast horizon. Turmoil in the oil-producing Niger Delta is a key downside risk.