Indications emerged Friday, 29th April 2022 that the European Union (EU) may turn to Nigeria and other oil-producing countries for oil supply amid moves to approve an embargo on Russian oil.
The report had it that the proposed oil embargo would be phased in over a period of some months, saying the new resolution was expected to be approved by the EU ambassadors ‘next week’ as part of plans to avoid delays.
The EU resolution comes against the background of new assessments that the Russian military’s eastern offensive was faltering amid plans to provide Ukraine with more weapons and support.
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With about one quarter of Europe’s yearly oil needs coming from Russia, European countries rely heavily on the country for supply. But the EU officials disclosed the Union is looking elsewhere for oil supply.
According to the report, as the oil embargo is phased in, officials said the bloc would seek to make up the shortfall by increasing imports from other sources, like Persian Gulf countries, Nigeria, Kazakhstan and Azerbaijan.
Since the invasion of Ukraine earlier in the year by the Russian government, the EU embargo, if enacted, will be the biggest and most important new step in the Union’s sixth package of sanctions against Russia, as the awaited sanctions will also be directed at Russia’s biggest bank, Sberbank.
It’s noteworthy that Nigeria, Africa’s largest oil producer, has faced challenges with oil production in recent months. The nation has had to close a number of its oil wells to keep criminals at bay. This was disclosed by the country’s Finance Minister, Zainab Ahmed in one of her recent interviews.
Mrs. Ahmed stated that upon opening the wells, Nigeria would meet its quota of producing 1.6 million barrels of crude oil per day (bpd), disclosing that for many months, Nigeria had produced 20 per cent less than capacity due to oil bunkering and other criminal activities.
Amid oil price rally as a result of Russia’s invasion of Ukraine, Nigeria has struggled to meet its Organization of Petroleum Exporting Countries (OPEC) quota of 1.73 million bpd.
The OPEC monthly oil market report (MOMR) for April 2022 showed that the country’s oil production fell by 20,000 barrels per day (b/d) in March, which yielded barely 1.24 million bpd, as against its previous 1.26 million bpd in February, 2022.
The nation also recorded a 24000 b/d decrease in oil output to 1.35 million bpd in March, down from 1.38 million bpd the previous month being February, 2022.
As the EU reportedly turns to Nigeria and others for supply, expectations are high that production would improve across the nation’s oil wells.
Nigeria relies heavily on crude oil sales to fix infrastructure, meet debt obligations and earn foreign exchange that would enable her monetary policy decision makers to address inflation.
This implies that Nigeria’s concerned authorities are expected to, at this juncture, expedite actions towards ensuring modalities are worked out in regard to eradicating all odds posing a barrier to the country’s crude oil production.
As the country continues to witness unabated practice of oil bunkering and other related oil thefts, time has obviously come to deploy a new measure of putting a stop to the deadly societal menace.
So, as dependency pertaining to oil supply is expected to be high in the nearest future, Nigeria has no option than to swing into action without further ado.