CEM REPORT, ENERGY | The global oil market is expected to see tightened policy in the second half of 2023, which would push oil prices higher, the International Energy Agency (IEA) has predicted.
According to the Executive Director of IEA, Fatih Birol, at the Columbia Global Energy Summit in New York, next winter will be challenging for the region in terms of energy supplies.
He added that following Russia’s invasion of Ukraine, global markets have restructured noting that sanctions on Russian energy have forced countries to look elsewhere for crude oil.
Birol noted that Europe was particularly susceptible to declines in Russian supply, but a milder winter helped avoid a worst-case scenario.
The prediction rides behind the recent surge in oil prices moving above $80 since the beginning of the month. This was triggered by the recent voluntary production cuts of 1.66 million barrels per day (bpd) from May until the end of 2023 by the Organisation of Petroleum Exporting Countries (OPEC) and allies including Russia known as the OPEC+.
International benchmark Brent futures traded at about $87 a barrel last week, and US crude futures traded at about $83 a barrel.
This may be a favourable prediction for Nigeria whose major trade is in crude oil. With falling reserves and a shortage of forex, a price rise will really be favourable for the country.
However, challenges in crude oil theft amongst other challenges facing the production of oil will pose a negative faction Nigeria harness the beat of the situation. The cou6jas consistently struggled to meet its OPEC quota
