Nigeria contributes to OPEC’s July production rise of 1.17mbpd

OPEC’s total oil production jumped by 1.17 million barrels per day (bpd) in July from June as many Gulf producers restored some output that was shut in for three months due to the closed Strait of Hormuz. The OPEC increase was also made possible by Nigeria’s improved production output which has been consistently above the quota allocated to her by the oil alliance. While OPEC assigned a production quota of 1.5mbpd to the country, by July 2026, crude oil production, from available data, averaged 1.56 million bpd (excluding condensate), translating to 104 per cent of the country’s designated OPEC contribution limit. In January and May, Nigeria contributed 1.53mbpd respectively to OPEC+ representing 102 per cent compliance. However, in February, March and April, the country failed to meet the quota allocation contributing 1.40mbpd or 93 per cent compliance; 1.38mbpd or 92 per cent compliance and 1.48 mbpd or 99 per cent compliance respectively to OPEC+. According to a Reuters survey based on ship-tracking data and information provided by sources at OPEC, oil companies, and consultants, output at the 11-member OPEC rose to 19.85 million bpd in July, extending the monthly increases for the second consecutive month. In May, when major Gulf producers slashed output, OPEC’s oil productions dropped to the lowest level since 2000, and also lower than OPEC production at the height of the Covid lockdowns, when the reduction was prompted by the collapse in demand as a result of the lockdowns. It is worth noting, however, that the May OPEC figure excludes the UAE, which left the group as of May 1. Reuters report explained that the July increase in output was led by Iraq and Kuwait, with Iraq showing the biggest monthly rise in production. Iran also raised output and supply to markets in July, benefiting from two weeks in July in which there was no U.S. blockade to try to curtail Iranian oil exports. Giving a further breakdown of the countries that influenced the increase, Reuters noted that Kuwait produced 1.971 million bpd of crude oil in July. That was up from 1.65 million barrels daily in June, which in turn was up from just 580,000 bpd in May. Still, volumes were well below OPEC+ quotas as the shipping constraints in the Middle East prevent a full recovery of output. At OPEC+’s meeting earlier this month, the group said it would boost production targets by another 188,000 bpd from September. With this, OPEC+ effectively unwinds the last portion of its production cuts agreed in 2023 to balance the market in a way favourable for member states. OPEC+ has been unwinding the cuts since spring, but most of that has only been on paper as the Strait of Hormuz blockade has prevented the normal flow of crude oil out of the Gulf producers. Theoretically, OPEC+ should in September produce 1.65 million bpd more than it did in 2023. In practice, this would be challenging because the situation with security in the Persian Gulf is not much better than it was in March, although some tanker traffic is being reported.