The Organization of the Petroleum Exporting Countries (OPEC) is planning to put a cap on Libya and Nigeria's oil outflows, with the increased production of these two OPEC producers further complicates the cartel's efforts to draw down oversupply and raise oil prices, The Wall Street Journal.
"Nigeria is definitely becoming a concern for us," an OPEC delegate from an Arab country in the Persian Gulf told The Journal, while OPEC delegates from some other nations have expressed similar concerns.
According to a Platts poll, Libya and Nigeria are expected to continue to increase oil production in the coming months. The combined output of the two countries is currently about 380,000 bpd above October levels, the month that OPEC used as a benchmark to base its production cuts. Militant, attacks on oil infrastructure and blocked port terminals have calmed down in both African countries; therefore, they are likely to continue to increase production, according to Platts.
Last week, a new militant group in the oil-rich Niger Delta said it was canceling the war, it had threatened to begin on June 30 and that it has decided to "give peace a chance", in what could To be a relief to Nigeria, which had begun to recover its oil production which was thwarted by militant attacks last year.
Nigeria's crude oil output increased to 1.68 million bpd in May, an increase of 174,200 bpd in April - the highest level in more than a year - after the resumption of cargo for the first time since October 2016, according to the latest OPEC monthly report.
Libya, meanwhile, is reaching a production of 1 million bpd - the highest in four years - and in line with its goal of reaching that production by the end of July. In May, Libya's average daily production was 730,000 bpd, according to OPEC secondary sources, an increase of 178,200 bpd compared to April.