Nigerian official: OPEC may meet to reassess global oil demand

The Organization of Petroleum Exporting Countries may meet to assess the impact on oil supply from the nuclear crisis in Japan as well as continued unrest in North Africa.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Mar. 16 -- The Organization of Petroleum Exporting Countries may meet to assess the impact on oil supply from the nuclear crisis in Japan as well as continued unrest in North Africa.

“I do suspect members of OPEC would be getting together to assess the situation of demand and supply,” said Nigeria’s Foreign Minister Henry Odein Ajumogobia, who added that Japan also is likely to affect the oil market and “therefore the prices.”

Oil prices fell in the aftermath of a massive earthquake that hit Japan on Mar. 11, after earlier unrest in the Middle East and disruptions of supply in Libya caused prices to rise to almost $120/bbl on Feb. 24.

But Japan, the world's third-largest oil consumer, is likely to require an increase in fuel oil imports to generate electricity in the long-term as a quarter of its nuclear power plants have been taken offline (OGJ Online, Mar. 15, 2011).

“OPEC is currently maintaining its ceiling,” Ajumogobia said, while noting that “current events in North Africa will probably inform the decision as to where those ceilings will be increased.”

He said, “If OPEC ceilings are increased, then our production will increase by the same token.” Ajumogobia said Nigeria produces 2.5 million b/d. "Our OPEC oil output quota is 1.8 million b/d and the rest is condensate.”

Ajumogobia’s remarks coincided with reports that Eni SPA, the largest foreign energy major in Libya, has halted oil production in the strife-torn nation but is still producing natural gas to supply some of the country's power stations.

Eni Chief Executive Paolo Scaroni explained oil production was stopped due to logistical problems with exports.

Meanwhile, Paris-based International Energy Agency said of Libya: "It is understood that most oil field operations have been shut-in or sharply curtailed, with transport routes choked off (OGJ Online, Mar. 15, 2011).”

Contact Eric Watkins at hippalus@yahoo.com.

More in Economics & Markets