The oil crises in Libya and Nigeria reduce OPEC’s ability to cope with increased production

A Reuters poll found that OPEC’s oil production increase in April was less than the planned increase in based on an agreement with its allies, since the dips in Libya and Nigeria offset the impact of increased supplies from Saudi Arabia and other major producers.

The survey found that the Organization of Petroleum Exporting Countries (OPEC) pumped 28.58 million barrels per day in April, an increase of 40,000 barrels per day from the previous month and less than the expected 254,000 barrels per day. in the supply agreement.

The National Oil Corporation in Libya previously declared force majeure at the oil port of Zueitina last week and warned that a “painful wave of closures” due to a political crisis has begun to devastate its facilities.

OPEC and its allies, known as “OPEC +”, are gradually reducing the agreed production cuts in 2020 as demand recovers from the Corona pandemic.

“OPEC +” meets on Thursday and is expected to confirm the previously agreed increase in production despite the rise in oil prices following the Russian invasion of Ukraine.

“The view is likely to stick to the plan,” an OPEC representative said at Thursday’s meeting.

The agreement provides for an increase in production by OPEC + members by 400,000 barrels per day in April, of which approximately 254,000 barrels per day are shared by the ten OPEC producers covered by the agreement.

According to Reuters polls, production is below promised increases from October to March, with the exception of February, when many producers lack the ability to pump more crude due to lack of investment, a trend exacerbated by the pandemic.

As a result, the 10 OPEC members are pumping far less than the deal requires. The survey found that OPEC compliance with the promised cuts was 164%, up from 151% in March.

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