By Udeme Akpan & Ediri Ejoh

Barely a week after an unprecedented drop, the price of Nigeria’s Bonny Light, yesterday, rebounded to $78.10 per cent, about 5.7 percent up from $73.87 per barrel recorded last week, thus raising hope for the execution of the 2023 budget.

The current price is over $3 per barrel in excess of the $75 per barrel budget benchmark, just as last week’s price slump was $1.13 per barrel below the benchmark.

Goldman Sachs – a research organization – had attributed the recent drop in price to the global economic slowdown in some economies, including those that procure crude oil from Nigeria.

However, the current leap was attributed to the ongoing crisis between Iran and the semi-autonomous Kurdistan region, which has constrained about 400,000 barrels per day (bpd) from flowing into the global market.

Checks by Vanguard yesterday showed that Iraq has indicated interest to restart oil operations in the region, but would prefer the state oil company to be directly involved, a development that remains unacceptable to the region.

It showed that oil prices, including Bonny Light, could continue to rise as the Iraqi government has already shut down oil exports from Kurdistan to Turkey, thus escalating the crisis.

But Nigeria might not gain much from the expected increase in prices because of the current limited output occasioned by pipeline vandalism, oil theft, and illegal refining in the Niger Delta.

According to the Organisation of Petroleum Exporting Countries, OPEC, although Nigeria’s oil production increased to 1.306 million bpd in February 2023, from 1.258 million bpd recorded in the preceding month of January 2023, it was still below its 1.8 million bpd output quota.

Commenting on the state of the market, yesterday, the National President, of the Oil and Gas Service Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, said: “The governments still have a long way to go in funding the budget.

‘‘We should not be comfortable because of the recent increase in oil production. There are indications that the recent gains remain by far less than the huge volumes we are losing to oil thieves in the Niger Delta.”