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OPEC’s Influence On The Oil Markets

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OPEC oil markets

OPEC’s Influence On The Oil Markets

Over the years, we have seen OPEC assert its dominance in the markets. In the short term, as prices recovered in the past month, it is now evident that OPEC has the tools necessary to adjust the markets. Albeit U.S shale remains the albatross on their neck, OPEC is still the leader of the oil markets. In April, when US President, Donald Trump called on Saudi and Russia to end the price war and help the markets recover, it was conceivable that Shale’s influence on the market was waning. Several companies felt the effect of the oil price crash, and Texas, the home of U.S energy had increased levels of unemployment.

OPEC has been regarded as a cartel and has acted as a cartel of late. Last week, for May, the Joint Ministerial Monitoring Committee (JMMC) pegged its compliance with production cuts at 87%. OPEC also restated the essence for all participating countries to reach 100% of their pledged cuts and make up for any previous deficits in quotas for July, August, and September.

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Iraq, Kazakhstan, Angola, and Nigeria prompted into action and ensured they fulfilled their parts of the cuts. Iraq, Nigeria and Kazakhstan have already submitted compensation schedules as the deadline for other underperforming members to submit was on the 22nd of June 2020. This sort of discipline is needed to offer support to prices, which translated into the recovery of the market.

The successful managing of the oil markets during this coronavirus era can be attributed to OPEC+, albeit they were responsible for the market plummeting months ago. In history, OPEC has always found a way to influence the markets during eventful periods. For example, the 1973 oil shock, the fall of the Soviet Union in 1991, and the Asian Financial Crisis all provided opportunities for OPEC to prove their mettle.

The Oil Cartel created in the 1960s allied with Russia and other nations, which results in the term “OPEC+.” According to Investopedia, this formation means they control over 50% of global supplies and 90% of proven reserves. What makes OPEC strong is the absence of alternatives to oil, and the de-facto leader Saudi Arabia, has the world’s lowest cost of production per barrel. The latter gives Saudi Arabia leverage to survive a crash in prices and creates some invincibility, which it leverages to dictate the market.

Conclusively, we have seen prices prop up and U.S shale suffering, OPEC+ seems like the influential deciding factor in the oil markets. It might lose its foothold in the future, but for now, the cartel calls the shots.

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Customs Corner

Volleyball: Customs Strikes Again, Defeats Saint Denis Olympique at 37th Club Championship in Egypt

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Author: Cynthia Idowu.

The Nigeria Customs Service is not only known for its doggedness in fighting smuggling and generating revenue for the federal government, the service has demonstrated a high level of professionalism in sport at the ongoing 37th Women’s African Volleyball Club in Cairo, Egypt.

The Customs Volleyball Women’s Team defeated its opponent, Saint Denis Olympique, by 3 – 0 to imprint its first win at the ongoing championship on Saturday, 27th of April, 2024.

The team who came out strong displayed the anti-smuggling doggedness with a lead in the first set of the game with a 25 – 21 score, sending shivers down the opponent’s spine.

Coach Pricillia Agera led the team, who displayed good skill and dominance with a nail-biting scoreline of 29-27 to clinge victory and secure a place in the annals of volleyball history.

Coach Priscilla Agera hailed the players for their unwavering commitment and tenacity, recognising the challenges they had overcome to achieve victory on the court.

In her words, “Despite the obstacles we’ve faced, you’ve shown the world what it truly means to be a team. Your resilience, your determination, it’s what sets you apart.”

Agera also commended the unwavering support of the Comptroller General of Customs, Bashir Adeniyi, for his steadfast commitment to ensuring the team’s participation in the championship and his instrumentality to their success, providing them with the resources and support they needed to compete at the highest level.

She said, “I appreciate CGC for taking a bold step to allow the team to fly the flag of the nation in this championship.

“I also want to give kudos to the President of Nigeria Volleyball Federation, Engineer Musa Nimrod, for his approval in ensuring the team returns, not forgetting the President of Nigeria Olympic Committee, Engineer Habu Gumel, for his relentless support for volleyball”.

Nigeria Customs Service will face Mayo Kane Evolution on Sunday in their third match after losing to Kenya Pipeline in their first game on Friday.

Recall that the basketball team of the Nigeria Customs Service (NCS) secured a spot among the top three teams at the recently concluded tournament held at the Indoor Hall of the MKO Abiola International Stadium, Abuja.

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Customs Corner

Nigeria Customs Service Reaffirms Commitment to Gender Equality in Decision-Making

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Author: Bashir Muhammad.

The Nigeria Customs Service (NCS) has reiterated its dedication to promoting gender equality in decision-making processes as part of its efforts to combat gender discrimination and gender-based violence.

At a capacity-building workshop on gender inclusivity, co-organized by the World Customs Organization (WCO) and the NCS in Abuja on Monday, April 22, 2024, the Comptroller-General of Customs, Bashir Adewale Adeniyi, reaffirmed his commitment to fostering a gender-inclusive environment within the service.

Acting Deputy Comptroller-General of Customs, Caroline Niagwan, represented the CGC at the event, where she emphasised the need for clear policies and procedures to address gender discrimination, harassment, and biases within the NCS.

“Our aim is to create a workplace where everyone has equal opportunities to grow and contribute to the service’s success, regardless of gender,” the CGC said. “We are committed to addressing gender discrimination, harassment, and biases within our ranks, and we will work tirelessly to ensure that our policies and practices reflect this commitment.”

The workshop brought together customs officials, gender experts, and stakeholders to discuss strategies for promoting gender inclusivity and addressing gender-based violence in the workplace.

With this reaffirmed commitment, the NCS demonstrates its dedication to creating a more inclusive and equitable work environment where all employees can thrive and reach their full potential.

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Customs Corner

European Union Proposes ‘Getaway Corridor’ Project to Combat Illicit Trafficking

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Author: Cynthia Ikebudu.

In a bid to tackle the rampant issue of illicit trafficking and smuggling across borders, the European Union (EU) unveiled a groundbreaking initiative aimed at enhancing law enforcement and trade facilitation at the Nigeria Customs Service Headquarters in Abuja on 16 April 2024.

The project, titled “Getaway Corridor,” according to EU representatives Louis Jacques Blondiau and Thierry Thimon, is set to cover ten countries, including Nigeria, with the goal of curbing illicit activities on the borders and suppressing smuggling operations.

Louis Jacques Blondiau, the leader of the group, emphasised that the Getaway Corridor project entails the development of a road infrastructure network designed to serve as a gateway for combating anti-smuggling activities while promoting trade facilitation. According to him, “each participating country will designate a specific zone for the project’s execution, which will involve four key phases: identification, implementation, evaluation, and project ownership, ensuring alignment with local needs and priorities.”

During the meeting, the Comptroller-General of Customs (CGC), Bashir Adewale Adeniyi, commended the EU’s initiative, acknowledging its potential to significantly enhance the effectiveness of law enforcement efforts in Nigeria. He pledged the full support of the Nigeria Customs Service and other relevant agencies in ensuring the successful execution of the project.

“The proposed Getaway Corridor project marks a significant step towards strengthening international cooperation in combating illicit flows and promoting trade security within the region. With the commitment of both the EU and Nigerian authorities, it is poised to make a meaningful impact in curbing illegal activities and fostering sustainable development,” the CGC stated.

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