Nigeria: Nigerian oil production rises in May
Latest reading: Brent crude oil prices averaged USD 64.09 per barrel in May, down 4.2% from April. On 30 May, the commodity traded at USD 63.92 per barrel, down 0.6% from 30 April, as OPEC+ announced plans for larger output hikes ahead. That said, prices rose in recent weeks due to the Iran–Israel conflict.
Turning to production, Nigerian oil output increased to 1.54 million barrels per day (mbpd) in May, from April’s upwardly revised 1.52 mbpd. Accordingly, output edged above Nigeria’s OPEC+ quota of 1.50 mbpd for the second month running.
In other news, in late May, the country announced that it would cap tax credits at 20% for oil companies and introduce performance-based tax incentives with the aim of attracting investment in the sector while shielding government revenue.
Outlook: Oil production is forecast to rise in 2025 from 2024, reaching its highest level since 2020. Rising capacity at the Dangote refinery will bolster crude demand in Nigeria, prompting an increase in production. That said, the country is expected to fall short of its OPEC+ quota of 1.50 mbpd, constrained by a precarious security situation and an uncertain domestic regulatory environment. Renewed turmoil in the oil-producing Niger Delta poses a key downside risk.