Nigeria’s crude oil production continues to decline, falling by 40,000 barrels per day (bpd) in September, according to a report by Reuters based on a survey of OPEC’s output for the month. This decrease adds to Nigeria’s ongoing struggle to meet its OPEC production quota, which has hovered between 1.2 and 1.3 million bpd since the start of the year. The nation produced 1.35 million bpd as of August 2024, according to OPEC’s latest report.

A key issue exacerbating Nigeria’s production woes is the massive oil theft occurring in the Niger Delta, a region responsible for much of the country’s crude oil output. This widespread theft, facilitated by an intricate network of illegal pipelines and local criminal gangs, siphons off large quantities of oil, undermining the government’s ability to raise revenues and maintain output levels. Estimates suggest that Nigeria loses hundreds of thousands of barrels daily to oil theft, which has crippled efforts to boost production and meet OPEC quotas.

The situation in Nigeria mirrors challenges faced by other OPEC members, particularly Libya, whose oil output also plummeted in September due to unrest and supply disruptions. Libya’s production fell by 300,000 bpd, while Iraq also saw a decline as it attempts to align its production with OPEC targets. Meanwhile, Iran increased its output slightly, despite sanctions.

OPEC’s overall oil production fell to 26.14 million bpd in September, down by 390,000 bpd compared to August. This drop, driven by Libya’s decreased supply, contributed to rising global oil prices amid concerns over demand and growing non-OPEC supply.

Although Nigeria’s oil sector contributes only a small portion to its GDP, it remains critical for foreign exchange earnings and government revenue. The ongoing oil theft in the Niger Delta not only affects production but also deepens the country’s fiscal challenges. Revenue losses from reduced output weaken the economy’s ability to support essential services, such as infrastructure, education, and healthcare. This persistent issue, combined with other production challenges, continues to threaten Nigeria’s economic stability at a time when boosting crude oil output is vital to meeting both local demand and international commitments.