OPEC+ set to release additional Oil output amid oversupply concerns – Reports

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The Organisation of the Petroleum Exporting Countries and its allies (OPEC+) has announced plans to expedite the release of an additional oil output, a move seen as prioritising market share over pricing stability.

In a decision reached on Sunday, OPEC+ said it would increase oil output by 137,000 barrels per day starting next month, the first instalment of a larger tranche of 1.65 million barrels per day that was initially scheduled to be held back until late next year.

An OPEC+ delegate explained, “The supply will be added monthly until September of the following year.”

The oil cartel stressed that future decisions would depend on market conditions. “Market conditions will determine the unwinding, and if necessary, we may halt or even reverse earlier hikes,” the group stated.

This development presents fresh challenges for Nigeria, Africa’s largest oil producer, which relies heavily on oil revenue for budget financing. Nigeria’s 2025 budget is benchmarked at $75 per barrel with an output projection of 2.06 million barrels per day. However, Nigeria’s Bonny Light crude has recently been trading below the benchmark, raising fiscal concerns.

Analysts warn that a sustained price drop below $75 per barrel could destabilise Nigeria’s fiscal framework. “A sustained price decline could increase the fiscal deficit to 4.3–4.4% of GDP, complicating efforts to finance economic diversification,” an energy economist explained.

Despite these concerns, Nigeria has shown resilience in production. Improved security in the Niger Delta, combined with the ramp-up of the Dangote Refinery, has boosted output. Nigeria exceeded its 1.5 million barrels per day OPEC quota in June and July 2025, following reforms to curb oil theft and incentives such as tax breaks

Industry officials confirmed Nigeria’s lobbying efforts for a higher quota. “Nigeria is actively seeking an increased OPEC quota, targeting 2 million barrels per day by 2027,” one senior oil ministry official disclosed. “With improved security and investment inflows, we believe the country can sustain higher production.”

Global energy forecasts also weigh heavily on market sentiment. The International Energy Agency (IEA) has projected a record supply glut in 2026, citing surging production from the Americas, including the US, Canada, Brazil, and Guyana, coupled with slowing demand in China.

Meanwhile, Goldman Sachs has issued a bearish outlook, warning that “Brent crude could drop to the low $50s per barrel levels next year.”

Geopolitical dynamics also shape the market. Following Russia’s invasion of Ukraine, India initially ramped up purchases of discounted Russian crude. But since late July, Indian refiners have scaled back. “Indian state-owned companies have ceased acquisitions, and refiners have reduced imports from Russia because of President Donald Trump’s recent campaign to lower Moscow’s energy profits,” a market source confirmed.

For Nigeria, the stakes remain high as OPEC+’s supply strategy threatens to undermine its fiscal projections. With global supply on the rise and prices under pressure, Nigeria’s ability to balance its budget will depend on both domestic reforms and OPEC’s policy shifts in the coming months

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