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Crude Oil being poured into a barrel

Nigeria, OPEC peers to lose $272bn in oil revenue

The United States Energy Information Administration, (EIA) has released a forecast that Nigeria and other members of the Organisation of the Petroleum Exporting Countries (OPEC), will see their combined net oil export revenue fall this year to its lowest level since 2002.

According to the latest forecast of the EIA, members of OPEC would earn about $323bn in net oil export revenues in 2020.

“If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” the forecast said.

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The EIA noted that the fall in the prices of crude oil were due to lower global demand for petroleum products because of responses to COVID-19.

It also said that export volumes had also decreased under OPEC agreements limiting crude oil output that were made in response to low crude oil prices and record-high production disruptions in Libya, Iran, and to a lesser extent, Venezuela.

It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”

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A decline in net oil export revenue for OPEC in 2020 because of continued voluntary curtailments and low crude oil prices, is expected, according to the EIA. It noted that the benchmark Brent crude oil spot price fell from an annual average of $71 per barrel in 2018 to $64 per barrel in 2019.

“EIA expects Brent to average $41 per barrel in 2020, based on forecasts in EIA’s October 2020 Short-Term Energy Outlook,” it said.

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The agency noted that OPEC petroleum production averaged 36.6 million barrels per day in 2018 and fell to 34.5 million bpd in 2019.

The EIA forecast that OPEC production will decline a further 3.9 million bpd to average 30.7 million bpd in 2020.

It based its OPEC revenues estimate on forecast petroleum liquids production — including crude oil, condensate, and natural gas plant liquids — and forecast values of OPEC petroleum consumption and crude oil prices.

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