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A new Charter of Cooperation among the Organisation of Petroleum Exporting Countries’ and 11 non-member oil producing nations (OPEC+) may create a new window of opportunity for Nigeria amid concerns that the oil cartel’s influence in the global oil market was waning.
Khalid Al-Falih, Saudi oil minister was reported to have said that OPEC has agreed on a draft cooperation charter with the OPEC+ and is still working on which inventory metric to be used in the charter. The oil cartel had sought the buy-in of other big non-OPEC member countries, such as Russia, the world’s third largest oil producer, after the United States of America and Saudi Arabia. This was intended to stabilise the global oil market by cutting production.
The charter “has created one of history’s strongest producer partnerships, spanning the entire world from east to west,” Al-Falih said Tuesday. “Our objectives related to market stability are now matched by the horsepower needed to deliver them.”
Since the initial production cuts were agreed upon in late 2016, non-OPEC members like Russia have bolstered the Organisation’s ability to influence the global oil market. While OPEC controls less than 50 percent of the world’s crude oil production, the expanded coalition, known as “OPEC+,” controls a majority.
On July 1, OPEC and other allied major oil producers agreed to extend crude oil production cuts for nine months, a move designed to keep oil prices from falling as the United States of America’s production increases and concerns grow about global demand.
For Nigeria with economic fortunes tied to movements in oil prices, higher oil prices are a boon. This is so because Nigeria earns 95 percent of its dollars from selling crude oil. Anytime oil prices fall, they impact Nigeria’s foreign reserves. This is worsened because the … Read More...