In the latest monthly oil market report released by the Organization of Petroleum Exporting Countries (OPEC) on Thursday, October 12, comprehensive insights into Nigeria’s oil production for September came to the forefront. Nigeria produced 1.3 million barrels per day of crude oil during that month, excluding condensates production. When including condensates, the total production reached 1.5 million barrels per day.
Comparatively, other major oil-producing nations had their September production figures as follows:
- Libya: 1.19 million barrels per day
- Angola: 1.11 million barrels per day
- Algeria: 957,000 barrels per day
The OPEC report highlighted that the collective crude oil production of OPEC-13 averaged 27.75 million barrels per day in September 2023, marking a 273 thousand barrel per day increase compared to the previous month. Noteworthy contributors to this increase were Nigeria, Saudi Arabia, and Kuwait, while Venezuela and Equatorial Guinea experienced a decrease in production.
Furthermore, the report emphasized that in September, the share of OPEC crude oil in the total global production showed a slight uptick of 0.3 percentage points, reaching 27.6% compared to the preceding month. These insights provide a comprehensive view of the oil production landscape for that specific period, aiding in better understanding the dynamics of the global oil market.
According to the OPEC report, during the second quarter of 2023, Nigeria witnessed a significant improvement in its trade balance. This was primarily due to a notable increase in non-oil exports and a decrease in imports.
The weakening of the country’s exchange rate had a dual effect: it made imported goods more expensive, thereby suppressing imports, but it also made Nigerian goods more attractive to foreign buyers, encouraging non-oil exports. As the value of the Nigerian currency, the naira, dropped by nearly 40% since May, it significantly affected the trade scenario. In June 2023, Nigeria achieved a trade surplus of NGN 1,741.1 billion, a stark contrast to the deficit of NGN 116.5 billion recorded in June 2022. This positive shift indicates a strengthening trade position for the country.
However, this economic transformation wasn’t without challenges. Inflationary pressures heightened, as evidenced by the annual inflation rate rising to 25.8% year-on-year in August, up from 24.1% in July. This is the highest inflation rate seen since September 2005. Several factors contributed to this surge, including significant structural reforms.
These reforms involved the removal of fuel subsidies, the devaluation of the official exchange rate, and difficulties faced in food-producing regions. These changes, while impacting the inflation rate, were integral to the broader economic transformation efforts in the country.