NewsRescue
Oil now appears to be a liability as Nigeria sells oil at a loss of about $5/barrel with prices steadily under $30/barrel. And projections have it that the price of oil over the next months to year(s) will go to as low as $10/barrel.
Due to a lack of investment in the oil sector, Nigeria relied on foreign investors to explore and establish its oil industry. These companies in this “robber market,” charge between $30-35 per barrel produced as production costs. This charge is to cover their initial investment, current maintenance costs and protection of pipelines.
Saudi Arabia has one of the lowest global oil production rates at $8.50/barrel while the UK is one of the highest at about $52.50/barrel. The US, the current world top oil producer, utilizing expensive technology produces oil at $36.20/barrel. Russia does so at about $17.20/barrel and is still making about $10 profit per sale.
See list
- Kuwait – $8.50 a barrel
- Saudi Arabia – $9.90
- Iraq – $10.70
- United Arab Emirates – $12.30
- Iran – $12.60
- Russia – $17.20
- Algeria – $20.40
- Venezuela – $23.50
- Libya – $23.80
- Kazakhstan – $27.80
- Mexico – $29.10
- China – $29.90
- Nigeria – $31.60
- Colombia – $35.30
- Angola – $35.40
- Norway – $36.10
- United States – $36.20
- Canada – $41.00
- Brazil – $48.80
- United Kingdom – $52.50
At the current rate the some Nigerian oil producers have shut down while others still producing are doing so to recoup their investment and not for profit for Nigeria.
Oil prices were artificially crashed by OPEC in order to discourage investment in new technology like fracking in the US. However the validity and efficiency of this market strategy is impossible to determine due to unpredictable market forces.
The reappearance Iran in the oil market is also contributing to the fall in oil prices.
