With Nigeria's oil production reportedly hitting a more than 20-year low, one oil analyst tells CNBC why the country's oil dilemma should be at the top of investors' minds.
"I think Nigeria really should be at the top of the agenda, because this is not necessarily about low oil prices," Amrita Sen, chief oil analyst at Energy Aspects, told CNBC Monday.
"It is about the geopolitical backdrop, the Niger Delta Avengers and how the government is dealing with them and clearly this is a huge risk to the market," she added.
A string of attacks against Nigeria's oil infrastructure has put severe pressure on the country's overall output, with companies recently having to evacuate or close their facilities. The group who's claimed responsibility for these attacks is militant group, the Niger Delta Avengers, whose main goal is to "cripple" Nigeria's economy, according to its website.
"(Energy Aspects') latest count of Nigeria is that production is at a million barrels per day. Usually they produce 2.2 (million), so that's a record low and the worst is now there are threats from the unions," Sen added.
Similar comments have been echoed by other oil analysts, with Barclays' Miswin Mahesh telling CNBC last Tuesday, that Nigeria was the factor that was "really spooking markets." He noted that it would take longer to resolve, than the outages seen recently in Canada.
On Monday, the Nigerian army said it had made arrests of some individuals from a militant group, with the belief that some were suspected members of the Niger Delta Avengers, Reuters reported.
According to the news agency, the recent supply disruptions around the globe—such as those seen in Nigeria and Canada—amount to as much as 3.75 million barrels per day, having helped offset concerns surrounding the supply glut.
On top of that, Sen added that U.S. dollar moves could cause some volatility in oil; but added that the more these outages lasted, the more likely investors would see "a complete decoupling between the dollar and oil."
Crude prices jumped in early Monday trade, after a bullish call from Goldman Sachs, who said the market had moved from a state of oversupply to a deficit.
Energy Aspects, however, believes signs of a rebalancing process started back around February, when supply started falling, and will continue to hold despite potential spells of volatility.
"You're going to get some volatility along the way, there is a lot of net length in the market, you can always get these weeks-long exits, but the secular trend is definitely higher."