The Nigerian government’s ambitious plan to boost crude oil output to 2.06 million Barrels Per Day (bpd) in 2025 may lead to tension with the Organization of Petroleum Exporting Countries (OPEC) due to its production cap, as noted in a Bloomberg report. The country’s plans to boost crude oil production offer a much-needed lifeline to its Economy but also pose significant risks of conflict with OPEC specified quota, which are designed to regulate global oil supply and maintain stable prices. As per the report, Nigeria recently recovered from a protracted output slump primarily due to improved Security conditions.
This has placed the government in a challenging position as a result of this rebound, having to strike a balance between increased production and OPEC’s output curbs, which have kept the price of crude oil above $70 per barrel globally. Nigeria’s crude output in late 2024 was 1.48 million barrels per day, just below Nigeria’s OPEC+ quota of 1.5 million bpd, marking a significant recovery from the 1.1 million barrels per day recorded in 2022 during widespread theft and vandalism. Reversing the past trend of shortfalls was made possible by the enhanced security, which includes measures aimed at Pipeline theft in the Niger Delta.
1.5 mbpd quota for Nigeria extended to December 2026.
With analyst projections of further increases in the country’s oil output, there is a possible showdown with OPEC due to the 1.5 million barrels quota placed on the country. Meanwhile, Gbenga Komolafe, the CEO of the Nigeria Upstream Petroleum Regulatory Commission, asserted that the nation is only interested in increasing its production goals prior to asking for a higher quota. OPEC typically established quotas in order to maintain global oil prices and balance supply and demand. While quota rises are a component of OPEC’s plan to resume output after it was suspended in 2022.
OPEC had previously raised Nigeria’s 2024 oil production to 1.5 million barrels per day (mbpd) and has subsequently extended it to December 2026. With the current situation, Nigeria could land in the same situation confronted by OPEC+ members Iraq and Kazakhstan, who have been dealing with the consequences of overproducing beyond their agreed quotas. Like Iraq and Kazakhstan, Nigeria’s need to address domestic economic pressures, including fiscal deficits and public spending, could conflict with OPEC’s collective objective of controlling supply to stabilize global oil prices.
Possible consequences of overproduction may await Nigeria.
Earlier in 2024, Iraq and Kazakhstan’s overproduction interfered with OPEC+’s attempts to stabilize the oil markets, prompting interventions and pledges to make up for the surplus production. Beginning in January 2024, Iraq and Kazakhstan have been producing too much crude oil, which has led OPEC+ to call for quick corrective action. Both nations were urged to submit compensation schedules outlining how they would offset their overproduction, postpone spot sales, and cut production in order to meet OPEC+ commitments. They have affirmed their commitment to fully compensate for overproduced volumes by September 2025.
If Nigeria surpasses its daily quota of 1.5 million barrels without prior negotiations or adjustments to its allocated limit, it runs the possibility of a similar situation. Another scenario witnessed was the case of Angola, an African oil-producing country, which exited the organization in December 2023 after refusing to accept stricter output restrictions. On the other hand, OPEC increased the United Arab Emirates’ (UAE) required production by 300,000 barrels per day (bpd) from January to September 2025, although, through successfully renegotiation of its quota after demonstrating sustained production growth and capacity expansion.
Related Article: FG sticks to 2025 oil output plan of 2m bpd
Nevertheless, President Bola Tinubu-led administration appears to be firmly committed to achieving the ambitious crude oil production target of 2.062 million barrels per day as outlined in Nigeria’s 2025 economic goals. To avoid any potential tension, Nigeria must engage OPEC in constructive dialogue, pursue gradual increases in output, and ensure its production ambitions contribute to, not undermine, global market stability. In the absence of early engagement with OPEC to discuss revising its quota, the administration’s stance signals a potential willingness to prioritize national economic recovery over strict adherence to OPEC’s production limits, setting the stage for a possible clash with the organization.