How will OPEC+ output increase shape oil market?

The Organisation of Petroleum Exporting Countries has reaffirmed the decision to proceed with a gradual return of 2.2 million barrel per day voluntary adjustments starting next month. Meanwhile, oil prices rise after heavy sell-offs drove the market to a multi-year low. However, tariff uncertainties and a rising supply outlook capped gains. Chinnan Dikwal, Vice Chair at African Energy Council joins CNBC Africa to review global market conditions and near term outlook.

Thu, 06 Mar 2025 11:58:29 GMT

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AI Generated Summary

OPEC's decision to gradually increase output by 2.2 million barrels per day reflects efforts to stabilize the market amidst volatile conditions
Recent company developments, such as Africa Oil Corporation's acquisition of Prime Oil and Seplat Energy's investments, signal a rejuvenation of the Nigerian oil and gas sector after years of stagnation
The oil and gas investment landscape in West Africa is experiencing a surge in capital inflows, driven by policy changes, geopolitical dynamics, and a growing interest from both major and independent energy companies

The Organisation of the Petroleum Exporting Countries (OPEC) has recently announced its decision to gradually increase output by 2.2 million barrels per day, starting next month. This move comes as oil prices recover from a multi-year low, driven by heavy sell-offs. However, uncertainties surrounding tariffs and a rising supply outlook continue to impact the market. Chinnan Dikwal, Vice Chair at the African Energy Council, joined CNBC Africa to discuss the global market conditions and the near-term outlook. The discussion shed light on the complexities and challenges facing the oil and gas industry, emphasizing the dynamic nature of the market. Dikwal highlighted various factors influencing the market, including tariff implications, swelling stockpiles in the US, and geopolitical tensions like the Russian-Ukraine conflict. Despite the planned output increase, OPEC remains cautious, stating that adjustments may be paused or reversed depending on market conditions. The interview also delved into recent company developments, such as Canada's Africa Oil Corporation's acquisition of Prime Oil and Seplat Energy's significant investments in new assets. These announcements signify a revitalization of the Nigerian oil and gas sector after a decade of stagnation. The rapid M&A activity in the Niger Delta region and the surge in oil production signal a positive trend for the industry. Looking ahead, Dikwal expressed optimism about the oil and gas investment landscape in West Africa, attributing the influx of capital to policy changes and renewed interest from oil majors and independent companies. The expansion of investments in key regions like the MFGBC Basin, the Orange Basin, and Mozambique reflects a growing confidence in Africa's energy market. Additionally, the rise of renewable energy projects and the support from initiatives like Power Africa are further catalyzing investment inflows across the continent. While challenges persist, the evolving energy landscape in Africa presents promising opportunities for growth and development.