Despite Global Price Increase, Nigeria’s Oil Profits Falls by N75.9 Billion

Despite Global Price Increase, Nigeria’s Oil Profits Falls by N75.9 Billion

Nigeria’s crude oil profits fell by around N75.9 billion between February and March this year, despite global oil prices rising for the third month in a row in March 2022.

According to the latest statistics from the Organization of Petroleum Exporting Countries’ April 2022 Monthly Oil Market Report, while oil prices have been rising since January, Nigeria’s output has been falling.

“Crude oil spot prices climbed for the third month in a row in March,” the organisation noted in its oil market highlights on crude oil price movements. On the basis of growing geopolitical tensions in Eastern Europe and worries that this may result in substantial oil supply shortages, along with trade dislocations, the North Sea Dated benchmark gained more than $20/barrel on a monthly average, while WTI gained about $17/barrel.

“OPEC’s Reference Basket price rose $19.53, or 20.8 percent, to $113.48 a barrel. Due to the unclear short-term oil supply and demand picture, oil futures prices experienced increased volatility. The ICE Brent front-month surged $18.36, or 19.5 percent, to $112.46 a barrel, while the NYMEX WTI rose $16.63, or 18.1 percent, to $108.26 per barrel.”

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“Crude oil spot prices climbed for the third month in a row in March,” the organisation noted in its oil market highlights on crude oil price movements. On the basis of growing geopolitical tensions in Eastern Europe and worries that this may result in substantial oil supply shortages, along with trade dislocations, the North Sea Dated benchmark gained more than $20/barrel on a monthly average, while WTI gained about $17/barrel.

“OPEC’s Reference Basket price rose $19.53, or 20.8 percent, to $113.48 a barrel. Due to the unclear short-term oil supply and demand picture, oil futures prices experienced increased volatility. The ICE Brent front-month surged $18.36, or 19.5 percent, to $112.46 a barrel, while the NYMEX WTI rose $16.63, or 18.1 percent, to $108.26 per barrel.”

When compared to the previous month of February, the country’s crude oil output fell by 744,000 barrels in March 2022.

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According to the OPEC document, Nigeria’s oil output fell from 1.378 million barrels per day in February 2022 to 1.354 million barrels per day in March 2022, a daily decrease of 24,000 barrels of crude oil.

This means that, despite rising global oil prices, the country’s oil output fell by 744,000 barrels in the first 31 days of March.

According to statistics from the worldwide statistical organisation Statistica, the average price of Brent crude, the global benchmark for oil, in February and March 2022 was $97.13/barrel and $117.25/barrel, respectively.

During the two-month period under consideration, the official exchange rate of the Central Bank of Nigeria was N416 to the dollar.

As a result of the loss of 980,000 barrels of petroleum in February, Nigeria’s oil profits fell by N39.6 billion.

It also fell by N36.3 billion in March as a result of the loss of 744,000 barrels of petroleum in the month.

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This means that the country’s oil profits fell by N75.9 billion over the two-month period, owing to a spike in global crude oil prices and the country’s financial difficulties.

The scenario verified government authorities’ and international oil companies’ suspicions that Nigerian crude oil output has been declining since 2021.

This, they claimed, was owing to the enormous oil theft that had plagued the sector since January 2021, but they added that attempts to remedy the problem were still underway.


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