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OPEC+: Nigeria Loses Out In Major Compensation For Members - NEW TELEGRAPH
In another major oil oil production drawback, Nigeria will be losing out from the benefits of the Organisation of Petroleum Exporting Countries and its allies (OPEC+) as it vows to offset 4.57mbpd overproduction by June 2026 as compensation for its members.
Nigeria’s exclusion has been attributed to its inability to meet its OPEC quota of 1.5 million barrels per day in recent months. Reports from OPEC yesterday explained that OPEC+ members had submitted plans to compensate for a total of 4.57mbpd in overproduction.
According to the reports, the compensation plans detail monthly offsets, primarily between May and October 2025. It added that OPEC+ had struggled with members’ overproduction, impacting the effectiveness of production cuts.
Analysis of Nigeria’s oil production in the past months showed that except in December 2024, Nigeria never reached its OPEC quota talkless of overproduction. In May 2024, Nigeria’s output was 1.251mbpd, according to OPEC. In June 2024, it was 1.36mbpd; October, 1.43 mbpd; Nov,1.48mbpd.
However, the highest average daily crude production of Nigeria in 2024 was December with 1.5 mbpd, meeting its OPEC production quota for the first time.
Also in Jan, 2025, Nigeria’s output was January was 1.539mbpd, meeting again OPEC’s quota. But in February, it fell to 1.465mbpd and in March it crashed to 1.401million barrels per day, a decline of 64,000barrel per day when compared to 1.465mbpd in February.
According to the OPEC report, the eight OPEC+ countries that have been cutting oil production will have to compensate 4.57mbpd in overproduction so far, and the compensation plans entail offsetting all above-quota output by June 2026.
The report highlighted that Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman have submitted their individual compensation plans to OPEC.
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Since the very first OPEC+ agreement in 2016, OPEC and its non-OPEC allies have been struggling with overproduction from several members, which has undermined the efficiency of the cuts and has muddled the figures about actual OPEC+ supply to the market.
The latest compensation plans envisage the biggest monthly compensations to be made between May and October 2025, with lower total monthly compensations left for next year.
In theory, this means that the OPEC+ producers will produce lower volumes than planned this year and offset the production 411,000 bpd hike from May 2025. In practice, OPEC+ hasn’t achieved full conformity with the production cuts as producers such as Iraq, Kazakhstan, and Russia have continuously failed to stick to their quotas.
