OPEC’s oil output saw a decline in March, driven in part by the Nigerian National Petroleum Company Limited (NNPC) reducing crude deliveries to domestic refineries, particularly the Dangote refinery. A Reuters survey revealed that Nigeria, along with Iran and Venezuela, saw a drop of 50,000 barrels per day (bpd) each, contributing to a total OPEC supply decrease of 110,000 bpd from February, totaling 26.63 million bpd in March.
The reduction in Nigerian supply was attributed to the suspension of crude deliveries to the Dangote refinery, which offset gains from higher exports. Despite this, Nigeria continued to produce slightly above its OPEC quota, maintaining its position in the group. The fall in output from Iran and Venezuela was also linked to U.S. efforts to limit their oil flows.
The NNPC’s decision to delay seven crude oil cargoes, which were meant to deliver approximately 245,000 bpd to the Dangote refinery in April, added to the concerns. According to S&P Global, the delays were due to unresolved payment terms between NNPC and Dangote, specifically related to the termination of the naira-for-crude deal and the withdrawal of credit facilities. As a result, Dangote Refinery is now required to submit letters of credit before receiving crude deliveries.
The delays and payment disputes have further complicated the operational dynamics of Nigeria’s oil and refinery sectors, with significant implications for both local production and export activities.
