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Nigeria’s Oil Export Earnings Falls, Output Deficit Hits 308,000BPD

Esther

In the second quarter of 2024, Nigeria faced a downturn in its oil export earnings, which fell to $12.1 billion from $12.4 billion in the previous quarter.


This decline is primarily attributed to a reduction in domestic crude oil production, which dropped from 1.33 million barrels per day (bpd) to 1.27 million bpd.


Consequently, Nigeria recorded an OPEC crude oil production deficit of 308,000 bpd, failing to meet its reduced quota of 1.58 million bpd.


The Central Bank of Nigeria (CBN) highlighted several factors contributing to this shortfall, including "unprecedented levels of oil theft, waning investment made worse by the energy transition, vandalism, and outright sabotage by local oil-producing communities."


These challenges are particularly pronounced in the Niger Delta region, where illegal refining activities and pipeline vandalism have severely hampered production efforts.


Despite these setbacks, the average spot price of Bonny Light crude oil rose slightly to $86.97 per barrel, providing some financial relief against the decline in oil export receipts.


However, the overall impact on Nigeria's economy remains significant, as crude oil and gas exports continue to dominate the country's export profile, constituting 87.38% of total exports.


This situation shows ongoing security and management challenges within Nigeria's oil sector, affecting both economic stability and compliance with international production agreements.


As the country grapples with these issues, questions about governance and resource management persist, with critics pointing to a "nation run on nothing but lies and propaganda," as one commentator put it.


The broader implications for Nigeria's economy are profound, as merchandise export earnings declined by 1.76% to $13.94 billion in Q2, 2024, reflecting the broader challenges facing the nation's oil-dependent economy.




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