The Organization of the Petroleum Exporting Countries and its allies (OPEC+) has announced a production boost of 411,000 barrels per day (bpd) starting July 2025. This move signals a gradual return to higher output levels after years of coordinated supply cuts aimed at stabilizing global oil prices.
The decision was reached during a virtual meeting of eight key member countries—Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman. They cited healthy market fundamentals and a steady global economic outlook as reasons for the increase.
OPEC+ has been cautiously increasing production since April, tripling the volume of adjustments in the subsequent months. This July increment is part of a broader strategy to roll back the 2.2 million bpd voluntary cuts agreed upon in December 2024. While the group emphasized flexibility, stating that future adjustments could be reversed if market conditions deteriorate, it remains committed to closely monitoring supply-demand trends through monthly reviews.
For Nigeria, Africa’s largest oil producer and a member of OPEC, the implications are significant. An increase in global oil supply often leads to lower prices—problematic for a country whose economy and foreign exchange reserves are heavily dependent on crude oil exports. The naira, already under pressure, could face additional strain if oil revenues dip.
As of late May 2025, the naira traded at N1,580–1,590/$1 on the official market and about N1,620/$1 on the parallel market. A prolonged slump in oil prices could deepen Nigeria’s fiscal deficit, undermine investor confidence, and widen the gap between official and black-market exchange rates.
Nonetheless, falling oil prices may offer a silver lining by reducing inflationary pressures. With fuel and diesel prices directly influencing the cost of transporting food and goods across the country, a decline in global energy prices could bring some relief to Nigerian households and businesses already battling soaring living costs.
OPEC+ reaffirmed that participating countries must compensate for any production excesses dating back to January 2024, with oversight from the Joint Ministerial Monitoring Committee (JMMC). The group stressed its continued commitment to cooperation and market stability, despite the complex balancing act between boosting revenue and managing price risks.
