Nigeria and other oil-dependent economies may face reduced revenue as crude oil prices dropped again on Wednesday, marking the third consecutive day of decline in global oil markets.
The price downturn is driven by growing doubts over the effectiveness of new sanctions placed on Russia and concerns over a possible increase in crude output by OPEC+. These developments continue to pressure global oil prices.
As of 05:11 WAT, Brent crude futures fell by 7 cents (0.11%) to $64.33 per barrel, while the West Texas Intermediate (WTI) dropped by 7 cents (0.12%) to $60.08 per barrel. The OPEC daily basket price also slipped to $67.54 per barrel from $68.33 recorded last week.
This trend poses a concern for Nigeria, which benchmarked crude oil at $75 per barrel in its 2025 national budget. Continued declines may lead to lower-than-projected government revenue.
According to market data reported by Reuters, U.S. crude, gasoline, and distillate stocks fell last week, temporarily boosting prices. However, the surge was not sustained due to renewed market pressure linked to Russia-related geopolitical tensions.
Last week, both Brent and WTI recorded their biggest gains since June following U.S. sanctions on Russian oil majors Lukoil and Rosneft. However, industry analysts say doubts remain about whether the sanctions will significantly reduce supply.
In response, Russia stated that global buyers can decide for themselves whether to continue purchasing its energy products. Meanwhile, some Indian refiners are pausing new Russian oil purchases pending further clarification, although others like state-owned Indian Oil say they will continue buying within the limits of sanctions compliance.
Nigeria earned ₦5.21 trillion from crude oil, gas, and related activities in the first half of 2025. However, total crude and condensate production from January to August stood at 406.84 million barrels—an 18.27% shortfall against projections.
Production dropped further in September to 1.39 million barrels per day (bpd), down from 1.434 million bpd in August, following a three-day PENGASSAN labor strike which disrupted key production and export terminals.
The Federal Government has expressed intent to push for an increased OPEC+ quota, targeting production of 2.06 million bpd, but analysts say falling prices could still limit gains.
As OPEC+ considers a modest output increase of around 137,000 barrels per day in December, Nigeria risks declining oil revenue if the current downward price trend continues.
