Reduced oil prices have left many oil producing countries in Africa in turmoil as they struggle to deal with the coronavirus crisis. Since Saudi Arabia reduced prices earlier this month, oil stocks all around the globe have crashed.
At a time of distress, the Republic of Congo’s oil minister wrote to the Organisation of the Petroleum Exporting Countries (OPEC) secretary general Mohammad Barkindo for an emergency meeting to find a way to keep member nations in Africa from sinking amid the coronavirus crisis.
Roderick Bruce, principal research analyst for Africa at IHS Markit told the media, “Companies are reviewing their whole portfolios on a daily basis. “They (African countries) are in a very difficult position.”
As a result of the oil price war and the coronavirus pandemic, in Nigeria, production is forecast to fall by 35 percent without offshore field investments. Across Africa, Rystad estimates delayed spending could mean 200,000 barrels per day (bpd) drop in expected output by 2025.
While oil producing giants such as Saudi Aramco and Adnoc are increasing production to deal with the price drop, producers in Africa, on the other hand, are struggling to sell their oil.
Angola’s production has dropped significantly from close to 2 million barrels per day a decade ago to 1.4 million barrels of oil per day.
Earlier this month, Saudi Arabia-led OPEC has started a price war after negotiations failed with Russia regarding curbing production in light of the coronavirus outbreak.
Global oil prices by around 30 percent, the highest in the last two decades. However, prices have somewhat stabilised since then.