OPEC+ Production Cut Output Now At Lowest Level In Nearly 3 Decades

Cut in crude oil production

The Organisation of Petroleum Exporting Countries (OPEC) member-countries has recorded its lowest production cut output level in nearly 3 decades. This is due to production cuts after low demand for the commodity which was heavily impacted by the COVID-19 pandemic.

So, in an effort to strengthen global prices for the commodity which was struggling with weak demand during a global lockdown occasioned by the pandemic, OPEC decided to cut production to 22.69 million barrels per day. The last time production cut went this low was during the Gulf War in 1991. 

One of the key stakeholders and highest producers of black gold, Saudi Arabia, has been compliant in its production cuts through the month of June. On the other side, Nigeria has promised to do its parts in implementing total compliance with the cuts. 

Start Your Business In 30 Days

What To Know About OPEC Production Cut

The price of Brent crude has been floating over $40 since May, compared to record lows in the preceding months. The production cuts from OPEC countries and other allies such as Russia (OPEC+) is the major reason for the stability. This has helped revive the price of Brent Crude to over $40. 

Nigeria, Angola, and Iraq are still lagging in full compliance, meeting only 77%, 83%, and 70% (respectively) of their quotas. Other Gulf nations have implemented further cuts, Saudi Arabia reduced production by 1.13 million barrels to 7.53 million a day in June. 

And, other members like Venezuela pumped only 340,000 barrels a day in June. Though Venezuela is exempted from cuts as the country is dealing with a series of issues from US sanctions to a severe economic recession.

Meanwhile, Russia hit its target quota for the second month in a row as countries outside the OPEC also cut production due to falling demand impacted by the COVID-19 pandemic. 

How It Affects Nigeria

The production cut is indeed great news for oil-producing countries, especially a country like Nigeria. Black-gold makes about 90% of Nigeria’s foreign exchange earnings. This new development in the industry has indeed had a positive impact on Nigeria’s reserve. More than two-thirds of government revenue also comes from the downstream sector.



Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Join Entrepreneurs Family

No spam, only business insights and tips. 

Entrepreneurs Sign Up

Business Registration

Most Popular

Join Entrepreneurs Family

No spam, only business insights and tips. 

Entrepreneurs Sign Up

Related Posts

How to start internet business

How To Start a Successful Internet Business

The Internet offers vast opportunities for business visibility and reach. Across the globe, businesses of various sizes and types are utilizing these chances to expand and extend their reach beyond local boundaries into new territories. Are you contemplating starting a business? Then, consider starting an internet business. How do you

Best WordPress Plugins

Where To Find The Best WordPress Plugins

WordPress, a versatile content management system, reigns as the go-to choice for building websites due to its adaptability. It operates on an open-source platform, allowing extensive modifications using plugins. These plugins, essential for feature augmentation, hold the key to unlocking your site’s true potential. What are the best WordPress plugins?

How to Improve Operational Efficiency and Productivity in an Organisation

How to Improve Operational Efficiency and Productivity in an Organisation

In today’s interconnected world where businesses compete fiercely, organizations need to be super efficient. Being efficient means doing things in a smart way that saves time and resources while still delivering good results. Operational Efficiency and Productivity in an Organisation is the central process that drives growth and stability in

AI in social media marketing

How to Leverage AI in Social Media Marketing

Are you ready to boost your social media marketing game using AI? How exactly can you harness AI for your social media marketing advantage? To kick things off, consider this: there are over 4.60 billion users on social media platforms. Social media companies continually strive to keep up with this

Scroll to Top

Join Entrepreneurs Family!

Get access to FREE business insights and funding opportunities daily.

Entrepreneurs Sign Up