Brent surges after OPEC+ output cut announcement

Oil prices are on the rise as OPEC and its allied oil producers have announced further output cuts of around 1.16 million barrels per day. This move has been described as a surprise by many in the industry. Kola Karim, the Chief Chairman of Shoreline Group, discussed the impact of this decision in a recent interview on CNBC Africa. Karim highlighted that recent events, such as the collapse of global banks and financial institutions, as well as the legal ruling favoring Iraq over Turkey regarding a pipeline, have contributed to the downward pressure on oil prices. He predicted a rebound in prices and emphasized the opportunity for OPEC to exert its influence by implementing output cuts. The current output cuts, set to begin in May, will take a total of 2 million barrels per day off the global market, leading to a firming up of prices. Karim also pointed out that Saudi Arabia, with its significant oil reserves, has the capacity to make further cuts beyond the agreed amount. He expressed confidence in the possibility of oil prices reaching $100 per barrel by the third quarter of the year, citing factors such as geopolitical tensions and increasing demand from countries like China, which are ramping up industrial activity post-pandemic. In the context of Nigeria, Karim stressed the importance of achieving production targets to support the economy, particularly given the country's heavy reliance on oil revenue. He outlined efforts underway to increase production levels and the need for continued investment in infrastructure and security in the Niger Delta region. Karim expressed optimism about Nigeria's ability to reclaim its position as a leading oil producer, provided key challenges are effectively addressed. Overall, the outlook for oil prices appears positive, with factors such as production cuts and growing demand contributing to a potential rise in prices in the coming months.