OPEC dismisses report of crude oil price dropping to $50 per barrel  

The Organization of the Petroleum Exporting Countries (OPEC) has refuted a report suggesting that crude oil prices could drop to $50 per barrel, a claim allegedly linked to Saudi Arabia’s Oil Minister.

The report, published by the American news outlet, the Wall Street Journal, on Wednesday, alleged that Prince Abdulaziz bin Salman had warned that crude oil prices might plummet to $50 if OPEC members, including Nigeria, fail to adhere to the production cut agreement.

Reacting to the claim, OPEC said on its X handle that the report is false and entirely unfounded.

The organization clarified that no such conference call took place last week, and no call or video conference has occurred since the last OPEC+ meeting on September 5.

It emphasized that the alleged statements, attributed to unnamed sources, are entirely baseless and fabricated.

What OPEC is Saying 

The statement from OPEC secretariat read in part:

“With reference to the Wall Street Journal (WSJ) article, dated 2 October 2024, titled “Saudi Oil Min Said Prices May Fall to $50/B if Others Cheat, Sources Say,” the OPEC Secretariat categorically refutes the claims made within the story as wholly inaccurate and misleading.

“The article falsely reported that a conference call took place in which the Saudi Arabian Energy Minister allegedly warned OPEC+ members of a potential price drop to $50 per barrel should they fail to comply with agreed production cuts. It also attributed an alleged quote to the Minister, stating: “Some better shut up and respect their commitments toward OPEC+.” These claims are entirely unfounded.

“OPEC secretariat stresses that no such conference call occurred last week, nor has any call or video conference taken place since the last OPEC+ meeting on September 5. The alleged statements, attributed to unnamed sources, lack any credibility and are completely fabricated.”  

Why this matters 

While the oil sector contributes only a small fraction to Nigeria’s GDP, it remains a crucial source of foreign exchange and revenue for the federal government.

Its significance extends beyond economic metrics, playing a vital role in funding various government functions.

The rise or fall the international price of crude oil has a substantial impact on the country’s fiscal health. Higher price will translate into increased revenue, which supports budgetary allocations for essential sectors such as infrastructure, education, and health.

Conversely, a significant decline in crude oil prices could result in revenue shortfalls, potentially delivering a severe blow to an already fragile economy, as the nation has experienced in recent years.