Crude oil prices continued its rise yesterday, making it the sixth day in a roll. The sustained rise is supported by robust U.S. economic growth and the risk of supply disruptions from Venezuela and Russia, though prices were on course for their steepest annual decline since 2020.
Brent crude futures were up 13 cents, or 0.2 per cent, to $62.51 a barrel, while U.S. West Texas Intermediate crude was up 22 cents, or 0.4 per cent, at $58.60. Both contracts have gained about six per cent since December 16, when they plunged to near five-year lows.
“What we’ve seen over the past week is a combination of position squaring in thin markets, after last week’s breakdown failed to gain traction, coupled with heightened geopolitical tensions, including the U.S. blockade on Venezuela and supported by last night’s robust GDP data,” IG analyst Tony Sycamore said.
U. S. data showed the world’s largest economy grew at its fastest pace in two years in the third quarter, fueled by robust consumer spending and a sharp rebound in exports.
Still, Brent and WTI prices are on track to drop about 16% and 18%, respectively, this year – their steepest declines since 2020 when the COVID pandemic hit oil demand – as supply is expected to outpace demand next year.
On the supply side, disruptions to Venezuelan exports have been the most significant factor pushing up oil prices, while Russia’s and Ukraine’s continued attacks on each other’s energy infrastructure have also supported the market, Haitong Futures said in a report.
More than a dozen loaded vessels are in Venezuela waiting for new directions from their owners after the U.S. seized the supertanker Skipper earlier this month and targeted two additional vessels over the weekend.
Additionally, oil shipments from Kazakhstan via the Caspian Pipeline Consortium are set to drop by a third in December to the lowest since October 2024 after a Ukrainian drone attack damaged facilities at the main CPC export terminal, two market sources said on Wednesday.
U.S. crude inventories rose by 2.39 million barrels last week, while gasoline stocks increased by 1.09 million barrels and distillate inventories rose by 685,000 barrels, market sources said, citing American Petroleum Institute figures on Tuesday.
Nigeria’s economic diversification project is gaining ground. Oil is now accounting for a smaller share of the Gross Domestic Product (GDP), 33 per cent of government revenue, and 51 per cent of exports. With oil now a smaller share of GDP and fiscal revenue, a sharp oil-price decline is being cushioned by the flexible foreign exchange (FX) regime, rising non-oil exports, and growing services trade. The deployment of the Electronic Forex Market Surveillance System, shift to a single, market-determined exchange rate regime, and enhanced risk-based banking are expanding Nigeria’s capacity to absorb external shocks and diversify away from oil, reports Assistant Editor COLLINS NWEZE.
After nearly a decade in which real Gross Domestic Product (GDP) growth averaged about two per cent, the economic reforms initiated by the Federal Government have begun to restore momentum and confidence in Nigeria’s broader macroeconomic environment. In the second quarter of 2025, the economy expanded by 4.23 per cent—the strongest growth in four years—driven by improvements in telecommunications, financial services, and oil production.
The introduction of the Nigerian Foreign Exchange Code has established clear rules for transparency, ethics, governance and fair dealing among authorised dealers. The deployment of the Electronic Foreign Exchange Management System (EFEMS) system, powered by Bloomberg BMatch, has equally transformed FX trading through mandatory order submission, real‑time regulatory visibility, and enhanced price discovery. Together, these reforms have reduced opacity and manipulation, and restored discipline to the market. The naira now trades within a narrow, stable range. The once‑substantial gap between the official and parallel markets has shrunk to under two per cent, down from over 60 per cent.
Foreign capital inflows reached US$20.98 billion in the first 10 months of 2025, a 70 per cent increase over total inflows for 2024 and a 428 per cent surge compared to the US$3.9 billion recorded in 2023, reflecting a clear resurgence in investor confidence. Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, explained that naira now trades within a narrow, stable range. The huge gap between the official and parallel markets has shrunk to under two per cent, from over 60 per cent. For him, macroeconomic indicators show that Nigeria is more resilient to external shocks today than at any point in her recent history.
For instance, Nigeria’s external sector strengthened decisively in 2025, with the current account balance rising over 85 per cent to US$5.28 billion in Q2, up from US$2.85 billion in Q1. Bolstering our external buffers, foreign reserves reached US$46.7 billion by mid-November, the highest in nearly seven years, providing over 10 months of forward import cover and significantly enhancing the economy’s resilience.
Cardoso explained that what is most important here is that Nigeria’s FX reserves are being rebuilt organically, not by borrowing, but through improved market functioning, stronger non‑oil exports, and robust capital inflows. “While oil production improved modestly to an average of 1.45–1.52 million barrels per day in 2025, the truly encouraging development is the strong performance of non-oil exports. Supported by ongoing reforms and greater exchange-rate flexibility, non-oil exports have grown by more than 18 per cent year-on-year, reflecting rising competitiveness under a truly market-driven FX framework,” he said.
He disclosed that as with foreign investor inflows, diaspora remittances have also strengthened with confidence returning to official channels following enhancements in transparency, settlement efficiency, and reporting. “Remittances increased by approximately 12 per cent this year, and we expect this momentum to continue as the Non-Resident BVN, launched earlier this year, becomes more widely adopted in 2026.”
Flexible exchange rate to be sustained
The CBN boss said the apex bank is committed to maintaining the current flexible exchange‑rate framework that allows the naira to act as a shock absorber while limiting excessive volatility. “To strengthen this framework further, we will shortly be unveiling the revised FX Manual to expand market participation and tighten documentation standards, enhance EFEMS surveillance, and ensure consistent implementation to avoid any possibility of policy reversal. Recent assessments by rating agencies have provided significant external validation of Nigeria’s reform trajectory,” he said.
Already, Fitch, Moody’s, and Standard & Poor’s have all acknowledged the positive impact of Nigeria’s reforms, from stronger reserves to improved fiscal discipline and greater FX transparency. Across all three agencies, the direction is consistent: fundamentals are strengthening, reform credibility is rising, and Nigeria’s risk profile is improving. “Fitch upgraded Nigeria from B- to B (stable), recognising our commitment to orthodox policies including FX reform, monetary tightening, and ending deficit monetisation.” Moody’s also raised its rating from Caa1 to B3 in May, citing improved fundamentals and a stronger outlook. And just this November, S&P affirmed B-/B and revised its outlook to positive, underscoring sustained reform momentum, rising reserves, and enhanced macroeconomic resilience.
Moody’s has also further concluded its periodic review and while headlines may highlight risks, as rating agencies are mandated to do, the substance of the report reaffirms ongoing improvements, including stronger fiscal metrics and deeper diversification. “These endorsements of Nigeria’s policy direction have translated directly into improved borrowing terms, increased investment inflows, and enhanced credibility. Underscoring this progress, Nigeria this month successfully raised US$2.35 billion through a Eurobond issuance, attracting US$13 billion in orders, the largest in the nation’s history,” he said.
Major policy shifts lifting economy
Prof. Abiodun Adedipe, founder and Chief Consultant of B. Adedipe Associates Limited (BAA Consult), listed major policy shifts yielding positive results for the economy. He said that the CBN has eliminated strange arbitraging and round-tripping opportunity through the forex market reforms; through petrol subsidy removal, the Federal Government removed crippling annual waste of US$10.7 billion and created environment for competition; bank recapitalisation is creating stronger and more capable banks to fund US$1 trillion economy while fiscal consolidation is plugging leakages, deploying technology and making government agencies more accountable and expanding fiscal space at sub-national.
Continuing, Adedipe said the real game changer remains the tax reforms, capable of igniting regional competition (the secret behind Chinese economic renaissance) while the Nigerian Education Loan Fund, Consumer Credit Corporation, recapitalised Bank of Agriculture, National Credit Guarantee Company Ltd, Single digit interest rate mortgage loans are major steps that should be taken to support sustainable economic growth.
Support for domestic economy
Adedipe said that Nigeria’s economy is supported by large, youthful and rapidly growing population (estimated at 237.53 million in July 2025 and sixth largest in the world, median age at 18.1 years). The country, he said, also benefits from rapid urbanisation with 54.28 per cent in December 2023, up from 46.12 per cent in 2013 and 51.96 per cent in 2020, deepening internet penetration which is at 48.15 per cent in April 2025, up from 45.57 per cent in August 2023 and 31.48 per cent in December 2018.
Nigeria’s tele-density is at 79.65 per cent in May 2025, from 76.08 per cent in December 2024 and 102.97 per cent in Dec 2023, due to data cleanup at end of April 2024. “On global internet users, Nigeria with 123 million ranks 11th and 7th with over 84 per cent on mobile devices. Local oil refining continues to expand and prospects of new refineries, manufacturing is reviving and there is expanding interest in non-oil exports. Improvement in infrastructure will begin to positively impact the cost of doing business,” he said. He added that sustained deep reforms will enhance global competitiveness and Ease of Doing Business, plug leakages and shrink the space for economic rent.
Fiscal‑monetary coordination
The CBN explained that monetary reform cannot be effective in a vacuum. Alignment with fiscal policy has strengthened Nigeria’s macro stability and yielded tangible results including reduced domestic borrowing costs, improved liquidity conditions, and more predictable fiscal operations.
For instance, the discontinuation of direct deficit financing signals one prong in our commitment to discipline. “This stance is unequivocal as there will be no return to the practice of financing fiscal deficits by the Central Bank. In parallel, the fiscal authorities have embarked on key institutional reforms – including the implementation of a Revenue Optimisation (RevOp) framework, the establishment of a new National Revenue Agency, and upgrades to the Treasury Single Account (TSA) – to strengthen revenue mobilisation and public financial management.
“As we transition towards a full‑fledged inflation‑targeting framework, this partnership will deepen, ensuring fiscal and monetary policies reinforce each other in delivering durable price stability,” Cardoso said.
Oil/gas output, revenue position
The Nigerian National Petroleum Company Limited (NNPC Ltd) reported a significant surge in revenue, hitting N5.08 trillion in October 2025, up from N4.27 trillion recorded in September. The figures are contained in the company’s Monthly Report Summary for October 2025. According to the report, NNPC Ltd’s profit after tax (PAT) rose sharply to N447 billion in October, compared to N216 billion in September, stronger operational efficiency, improved market conditions, and enhanced cost optimisation strategies deployed by the national oil company.
The report shows that production hit 6,997 million standard cubic feet per day (mmscf/d) in October, up from 6,284 mmscf/d in September. Gas sales, reported on an M-2 basis, climbed to 4,713 mmscf/d, marking a significant increase from 3,443 mmscf/d recorded in the previous month. Crude oil production experienced a slight dip, falling to 1.58 million barrels of oil per day (mmbopd) in October from 1.61 mmbopd in September. NNPC Ltd also stated that it will continue to sustain industry-wide collaboration and drive production recovery initiatives.
Buffers against oil prices fall
Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, said global oil prices have dropped significantly, now hovering just above $63 per barrel while the naira exchanges at N1,445/$ at the official window. The Wall Street Journal’s grim forecast that Brent crude could fall below $50 per barrel by the end of 2025 only deepens the urgency for strategic policy responses. To strengthen economic buffers and sustain FX inflows, the CBN has proactively initiated strong measures aimed at cushioning the domestic economy against the looming oil price shock and ensuring sustainable economic development.
Nigeria’s 2025 budget is squeezed by assumption of oil production of two million barrels per day and an oil price of $75 a barrel. At a benchmark of $75 per barrel and a production capacity of two million barrels per day (mbpd), Nigeria’s oil revenues would fall given the present oil price which is below budget benchmark. Such a shortfall could push the fiscal deficit to between six and seven per cent of Gross Domestic Product (GDP), potentially fuelling inflationary pressures and weakening macroeconomic stability. Among these are policies to boost Nigeria’s non-oil export potential, strengthen backward integration to reduce dependence on imported goods, and streamline diaspora dollar remittances to enhance foreign exchange inflows.
Drawing from China’s economic strategy, the apex bank said Nigeria’s competitive exchange rate can drive export-led growth. To harness this potential, businesses are expected to adopt export-oriented strategies by targeting sectors with strong export potential such as agriculture, manufacturing and creative industries; implement import-substitution models by strengthening domestic production capabilities and reducing reliance on costly imports; and focus on value addition by shifting from exporting raw materials to processed goods, thereby boosting foreign exchange earnings.
Cardoso said Nigeria’s creative sector has potential to attract $25 billion annually to the economy, highlighting the untapped opportunities in Nigeria’s expanding creative sector, including music, film, crafts and digital exports. He urged businesses to explore international markets, digital platforms, and global tours to increase dollar revenue inflows. The CBN boss also recently advised telecom companies to reduce their dependence on foreign imports by producing key components of their inputs locally. The backward integration proposal for the telecom industry comes at a time the real sector is in dire need of sustainable growth. The CBN boss gave insights on what the economy stands to gain from backward integration in the telecoms sector.
Discouraging foreign services import
Speaking in Abuja during a visit by the Airtel Africa management team led by Group CEO Sunil Taldar, the CBN Governor underscored the importance of boosting local production to ease pressure on the dollar, generate employment and strengthen the national economy. Cardoso emphasised the urgent need to domestically manufacture key telecom inputs—such as SIM cards, cables and towers—that are currently being imported in large volumes. He highlighted that the CBN has taken deliberate steps to stabilise the foreign exchange market, strengthen the naira, and attract investor confidence. With these foundations now in place, he urged telecommunications companies to embrace backward integration as a strategic imperative.
In response, the Airtel Africa CEO commended the CBN’s reform efforts and voiced strong support for local production, noting that such a shift would ultimately yield long-term benefits for the telecommunications industry. He also reaffirmed Airtel’s commitment to expanding financial inclusion across Nigeria through innovative technology solutions.
Research Head, Cowry Asset Management Limited, Charles Abuede, said the CBN governor’s call was to discourage the importation of foreign services into Nigeria, especially when efforts can be made to develop such services locally. “The high demand for foreign exchange by telecom operators has further pressured the naira due to increased demand for the dollar. However, with adequate infrastructure development and a conducive operating environment facilitated by regulators, these challenges can be mitigated,” he said. According to Abuede, “given Nigeria’s FX policies, illiquidity in the foreign exchange market and infrastructure deficits, I think increased investment in the telecom sector would enable operators to embrace backward integration. This would allow them to manufacture key components, such as SIM cards, locally. As a result, production costs could decline—provided the operating environment remains stable. This will improve profit margins and enhance both top-line and bottom-line growth in the long run.”
Building resilient economy
He said Nigeria’s economy has been fully restructured and is now resilient, with huge buffers against global risks. Cardoso said the naira has equally emerged as a competitive currency, with the economy witnessing positive trade balances and large businesses moving from imports to export of locally produced goods and commodities. According to him, the positive economic indicators have combined to create resilient and strong buffers, keeping the economy in great shapes.
O n the impact of the trade tariffs on the domestic economy, the CBN boss said the tariffs are less of problems for the country. “And for us again, oil is basically the only commodity that was so exposed to the tariffs, and the impact of that was relatively modest. We now have a more competitive currency with the results that, for once, we have a situation where we have a positive balance of trade surplus, and we expect it to be six per cent in GDP for some time.
“So basically, what is happening is a complete restructuring of the economy, where we are encouraging people to go into domestic production, and, of course, discouraging imports. And I think we were very fortunate, because a lot of the things that were needed to have been done, we did them much earlier, and as a result of that, we’re able to create resilience and buffers against potential shocks,” Cardoso stated.
He explained further that oil was the oil commodity that was exposed to the trade tariffs, but the impact was equally modest. “So, and of course, in terms of anchoring expectations, we found that those who followed the Nigerian economy were fairly comfortable. And for us, again, oil is basically the only commodity that was so exposed, and the impact of that was relatively modest,” he said. Overall, oil prices may face further declines if OPEC+ decides to raise output. The alliance is expected to focus on reviving another sliver of production in December in a move that may amplify traders’ concerns about a global glut.
Crude oil prices increased yesterday as supply concerns emerged following Ukraine’s drone attacks on Russian energy infrastructure. The increase represented a trend that began last week, one fuelled by hope on some supply cuts.
Brent crude was trading at $67.37 per barrel, up 0.07 per cent from the previous close of $67.32, while the West Texas Intermediate (WTI) rose 0.08 per cent to $63.71 from $63.66.
During August 19 and August 23, 2025, in the world of oil market, an unpredictable change was observed in crude oil prices due to the changing expectations of global demand and supply in the oil market.
A close monitoring of the steady rise in the commodity price by The Nation indicated that on August 19, WTI opened at $62.53 and Brent at $65.87.
This moved up on August 20 when WTI rose to $63.00 and Brent to $66.70 indicating a high rise of 1.04 per cent and 1.38 per cent respectively. Further traction was gained later in the day, as WTI was rose to $63.32 and Brent $66.81.
The positive rise continued the following day as WTI closed at $63.42 and Brent at $67.54, but slowed on Thursday night as WTI slowed to $63.45 and Brent $67.56, representing a decline of -0.11 per cent and -0.16 per cent respectively. The weekly drawdown ended Friday at WTI of $63.50 and Brent at $67.57 with both seeing a slight decline of -0.03 per cent to WTI and -0.15 per cent to Brent as traders continued to be wary of the global economic indicators.
The market view in crude oil was characterised by a back-and-forth relationship between gains and losses with mid-week trades favoring gains but losses dominating end-week trades.
The rise yesterday followed a Ukrainian drone triggered a fire at Russia’s Kursk Nuclear Power Plant after being downed overnight, damaging a transformer and forcing a 50% reduction in output at one of its reactors, the plant’s press service said early Sunday. The Kursk facility, one of Russia’s largest, supplies electricity to 19 regions in the Central Federal District. Separately, Aleksandr Drozdenko, governor of Russia’s northwestern Leningrad region surrounding the city of St. Petersburg, reported a fire at the terminal in the settlement of Ust-Luga following the crash of a downed drone. He claimed on Telegram that 10 Ukrainian drones were shot down over the port, located near Russia’s border with Estonia, early Sunday. Drozdenko added that Novatek, the Russia-based natural gas producer operating the terminal, started repair and restoration work at the site.
Ukraine’s General Staff later confirmed that the military, together with the country’s Security Service, inflicted damage to infrastructure at the Ust-Luga terminal, which it defined as a key logistics hub for Russia in the Baltic Sea used for energy exports through its “shadow fleet” – sea vessels allegedly used to skirt oil sanctions on Moscow.
Further, US President Donald Trump said on Friday that he will know in two weeks whether progress can be made toward ending the Russia-Ukraine war, while also hinting at possible sanctions against Moscow. These developments heightened geopolitical risk concerns, lending upward support to oil prices. Markets were also buoyed by US Federal Reserve Chair Jerome Powell’s remarks at the Jackson Hole Economic Policy Symposium on Friday. His dovish comments strengthened expectations of a September rate cut, further supporting crude prices. “With policy in restrictive territory, the baseline outlook and shifting balance of risks may warrant adjusting our policy stance,” Powell said. Lower interest rates typically are expected to stimulate growth and increase oil demand, adding further support to prices.
Oil prices dropped yesterday, recording the largest monthly drop in almost three and half years after Saudi Arabia signaled a move toward producing more and expanding its market share, while the global trade war eroded the outlook for fuel demand.
Brent crude futures settled $1.13, or 1.76 per cent, lower at $61.94 a barrel. U.S. West Texas Intermediate crude futures dropped $2.21, or 3.66 per cent, to close at $58.21, the lowest settlement since March 2021.
For the month, Brent settled down 15 per cent and WTI was down 18 per cent, the biggest monthly percentage declines since November 2021.
Both benchmarks slumped after Saudi Arabia, one of the world’s biggest oil producers, signaled it was unwilling to prop up the oil market with further supply cuts and could handle a prolonged period of low prices.
“It raises concern that we could be headed towards another production war,” said Phil Flynn, senior analyst with Price Futures Group. “Are the Saudis trying to send a message that they are going to get back their market share? We’ll have to wait and see.”
Earlier this month, Saudi Arabia pushed for a larger-than-planned OPEC+ output hike in May.
Several OPEC+ members will suggest a ramp-up of output increases for a second straight month in June, sources told Reuters last week. The group will meet on May 5 to discuss output plans.
“The trade war directly reduces oil demand and hinders travel by consumers. Combined with OPEC’s unwinding of output cuts, the risk of oversupply is escalating,” said Raymond James investment strategy analyst Pavel Molchanov.
U.S. President Donald Trump’s announced tariffs on all U.S. imports on April 2 and China responded with its own levies, stoking a trade war between the world’s top two oil-consuming nations.
U.S. crude oil stockpiles fell unexpectedly last week on higher export and refinery demand, limiting some price losses.
Crude inventories fell by 2.7 million barrels to 440.4 million barrels in the week ended April 25, the Energy Information Administration said on Wednesday, compared with analysts’ expectations in a Reuters poll for a 429,000-barrel rise.
The Federal Government has allayed fears that the recent fluctuations in global crude oil prices could derail the 2025 national budget, assuring Nigerians that necessary measures are already in place to cushion any impact and adjust fiscal planning as required.
Responding to inquiries from The Nation on whether the volatility in oil markets poses a serious threat to the national budget, an authoritative source at the Ministry of Budget and Economic Planning explained that “there is no cause for alarm.”
According to the source, oil price fluctuations are not an unfamiliar development for the Nigerian economy, and the administration is not treating the issue as a crisis.
“There is nothing to panic about. Oil price volatility is not a new phenomenon. The minister has addressed this matter on several occasions. The national budget is fundamentally an estimate, and estimates are subject to adjustment depending on prevailing conditions,” the source stated.
Crude oil, though still the country’s primary source of export revenue, is no longer regarded as the sole pillar of national financing. To address the crude oil price dip, the government, the source said “has mapped out a two-pronged approach to managing the situation: boosting oil production while aggressively diversifying its revenue streams.”
Central to the oil sector strategy is the directive to the newly appointed leadership of the Nigerian National Petroleum Company Limited (NNPCL). The source revealed that President Bola Ahmed Tinubu has tasked the new board and management of NNPCL with raising production output and driving down the cost of crude extraction.
“The overarching objectives of the Tinubu administration are to increase production volumes and reduce the cost of production. This responsibility has been clearly assigned to the new NNPCL leadership, and timelines are attached to those expectations,” the source said.
While the upstream sector is expected to ramp up activity, the broader strategy focuses on bolstering non-oil revenues. According to the ministry, revenue-generating agencies such as the Federal Inland Revenue Service (FIRS), the Nigeria Customs Service, and other government-owned enterprises have been directed to significantly improve their performance and efficiency.
“These institutions have been charged to step up their operations. The government is committed to boosting other revenue sources to ensure budget sustainability, regardless of fluctuations in the oil market,” the source noted.
The Federal Government’s budget for 2025, like previous years, is built on a benchmark oil price, but officials have maintained that the fiscal framework includes buffers to absorb external shocks.
Economic planners have also pointed to the ongoing reforms aimed at expanding the tax base, improving customs processes, and optimizing returns from state-owned enterprises as crucial steps toward long-term stability.
While oil prices remain a critical variable, the administration insists that Nigeria’s fiscal strategy is designed to withstand temporary price shocks through agile adjustments, strategic reserves, and an increasing reliance on internally generated revenues.
Analysts say the current posture suggests a deeper shift in fiscal governance—one that moves away from historical overdependence on oil and toward a more diversified and resilient economy. With key agencies working under renewed mandates and performance metrics, stakeholders are watching closely to see how swiftly the government’s strategies materialize.
Speaking to the development, an economist and investment strategist, Dr. Wahab Balogun, offered an assessment of the potential implications for the national budget, declaring that while the situation warrants attention, it does not pose an immediate or unmanageable threat.
Dr. Balogun, who is the Managing Director and Chief Executive Officer of Ambosit Capital Managers, spoke in Abuja, stressing that Nigeria’s economic outlook depends more on policy agility and revenue diversification than on short-term oil price fluctuations.
“Falling crude oil prices do present a challenge, but they do not automatically constitute a serious or unmanageable threat to Nigeria’s national budget,” Dr. Balogun said. “It all comes down to how the government responds—with timely adjustments and a clear diversification strategy, the impact can be mitigated.”
He acknowledged that crude oil remains a vital source of revenue and foreign exchange for Nigeria, and that sharp price drops can reduce government income and widen the budget deficit. However, he noted that several countervailing factors can soften the blow.
According to him, Nigeria’s ability to shield its budget from oil price volatility depends significantly on the momentum of non-oil revenue generation.
“If the government continues to strengthen non-oil sources—through taxes, customs duties, and higher returns from government-owned enterprises—the budget becomes more resilient. The Federal Inland Revenue Service and the Nigeria Customs Service are key to this effort,” he said.
He added that the Tinubu administration’s plan to boost oil production while reducing the cost of extraction is a step in the right direction, particularly in a volatile global energy market.
“Production levels matter. If we can increase output and lower production costs, we may be able to offset some of the revenue loss from price drops. That’s the task given to the new leadership at the Nigerian National Petroleum Company Limited, and it’s a critical part of the equation,” Dr. Balogun explained.
He also noted the importance of flexibility in budget management. “The budget is an estimate—it’s not cast in stone. One of the government’s tools is the ability to revise assumptions and reallocate spending based on new realities. This fiscal flexibility is essential in times like these,” he said.
Dr. Balogun stated that stabilization buffers—such as strategic reserves, the Excess Crude Account, or contingent borrowing facilities—also play an important role in cushioning short-term shocks.
“If those buffers are available and used wisely, the government can maintain stability even in a turbulent market,” he said.
The economist further pointed out that the broader global economic environment, including demand for oil, exchange rate dynamics, and investor sentiment, also influences the severity of any impact on the Nigerian budget.
Dr. Balogun said that the current administration has an opportunity to prove that Nigeria is moving beyond overdependence on oil and into a more diversified and resilient economic structure.
“The falling price of crude is a signal to do more, not a reason to panic. The key is proactive governance, institutional efficiency, and a realistic fiscal strategy,” he stated.
Meanwhile, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has said the country’s total Gas reserves hit 210.54 Trillion Cubic Feet (TCF) as of January 1, 2025, rising from the 209.26 TCF of January 1, 2024.
It also said the crude oil and condensate reserves hit 37.28billion barrels as of January 1, 2025.
The commission’s Chief Executive, Engr. Gbenga Komolafe made this known in a statement yesterday.
He said “Crude Oil and Condensate reserves stands at 31.44 Billion Barrels and 5.84 Billion Barrels respectively, amounting to a total of 37.28 Billion Barrels.”
The breakdown was 31.56bb of crude oil and 5.94 BB of condensate.
The statement reads in part: “The Commission, in keeping with its mandate as enshrined in the Petroleum Industry Act, 2021 (PIA), is committed to driving the efficiency and effectiveness of the upstream oil & gas sector, enhancing the growth of oil and gas reserves and ensuring sustainable increase in oil & gas production for shared prosperity, as articulated in the Regulatory Action Plan for 2024 and the Near Term (RAP).
“Against the foregoing, I am pleased to present to you an overview of the Nation’s oil, condensate, associated gas, and non-associated gas reserves as of January 1, 2025, as follows: Crude Oil and Condensate reserves stands at 31.44 Billion Barrels and 5.84 Billion Barrels respectively, amounting to a total of 37.28 Billion Barrels
“Associated Gas and Non-Associated Gas reserves stands at 101.03 Trillion Cubic Feet (TCF) and 109.51 TCF, respectively, resulting in total Gas reserves of 210.54 TCF.
“The Reserves Life Index is 64 Years and 93 Years for Oil and Gas, respectively.
“I, Engr. Gbenga Olu Komolafe, Commission Chief Executive, hereby declare the Total Oil and Condensate reserves of 37.28 Billion Barrels and Total Gas reserves of 210.54 Trillion Cubic Feet as the official National Petroleum Reserves Position as of 1st January, 2025.”
Crude oil production dips to 93% of OPEC quota
The Nigerian crude oil production declined from 98% of the Organization of Petroleum Exporting Countries (OPEC) quota of February 2025 to 93% of the quota in March 2025.
In its document titled: “Crude Oil and Condensate Production March 2025, yesterday, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), said in the month under review, “The average crude oil production was 93% of OPEC (1.5million barrels per day mbpd) quota.”
The document said Lowest and Peak combined crude oil and condensate production in March were 1.46million bopd and 1.76 bopd respectively.
NUPRC also noted that the daily average production in March was 1,400,783 barrels per day of crude oil and condensate (202993 bopd).
The report did not state the cause of the decline in output but it may not be unconnected with the disruption of production in Rivers State in the month under review.
It will be recalled that the output had declined by 5 per cent in February 2025 to an average of 1.67million barrels per day (bopd) from an average of 1.73 million bopd in January 2025 due to the maintenance of the Transmission Nigeria pipeline to Bonny terminal.
An unauthorized source at the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) who spoke with The Nation had said, “The decline was majorly due to pipeline maintenance (at one of the segments of Trans Niger pipeline going to Bonny Terminal) and fire outbreak at one of the production evacuation points of NNPC Ltd.
NUPRC has earlier released its monthly production data for February.
An economist, financial analyst and Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr. Muda Yusuf, has warned that the 2025 federal budget benchmarked at a crude oil price of $75 per barrel may be in jeopardy.
Yusuf, giving an in-depth analysis of the implications of US President, Donald Trump’s policies on the Nigerian economy, warned that the weakening of crude oil prices in the near term is very high, hence, it would impact of the Federal Government’s revenue and foreign exchange earnings in 2025.
Yusuf’s submissions is based on several factors. For instance, the United States of America [USA] has been the largest oil producer globally for the past six years. In 2023, for instance, the USA produced an average of 21.91 million barrels per day, which is about 22 per cent of the global oil production. This, the CPPE boss noted, places the US in a good position to influence global oil output and prices.
Yusuf further explained that the Trump administration has committed to increasing oil output to reduce energy prices in the USA and globally. The country, he argued, also has the global diplomatic clout to get OPEC to boost oil production. Additionally, the Trump administration, he noted, is committed to moderating the current global geopolitical tension, especially the Russian-Ukraine war, and possibly the Israeli-Hamas war.
Yusuf, an economist, explained that If President Trump succeeds in ending the war, especially the Russian-Ukraine war, the prospects for growth in global oil output would be considerably heightened because Russia supplies about 10 million barrels per day (mbpd) of oil to the global oil market. He added that there is also a good chance that the current sanctions on Russia by the USA may be lifted thereafter as the relationship between the two countries normalises.
Arising from the foregoing, Yusuf intoned that the signing of an Executive Order by President Trump creating a National Energy Dominance Council to drive the country’s energy dominance agenda may just well be preparing for America’s take-off of the crude oil business.
“In light of these, the scenario of a weakening of crude oil prices in the near term is therefore very high.
“Therefore, in this context, the crude oil price benchmark of $75 per barrel in the 2025 Nigerian federal budget may not hold. This would impact the outlook for government revenue and foreign exchange earnings in 2025,” Dr. Yusuf warned.
He further noted that the decision of President Trump to opt out of the Climate change agreement [the Paris Accord] also has far reaching consequences for the global oil market.
This, he argued, signals less commitment to climate change concerns and the acceleration of more investment in fossil fuels by the USA.
Additionally, Yusuf further said, the sweeping imposition of trade tariffs on major US trading partners may weaken the global economic growth outlook, dampen global oil demand and depress oil prices.
But there’s a silver lining to all of this. “However, the upside is that energy prices would drop globally – the price of diesel, PMS Jet fuel, gas etc. This would gladden the hearts of many economic players in the country. The transmission effect would be very fast because of the deregulated regime of the oil and gas sector,” Dr. Yusuf submitted.
Crude prices edged up about one per cent to a five-month high on yesterday on expectations that demand would rise following the release of positive economic news from the U.S. and China, while OPEC+ cuts and attacks on Russian refineries tighten global supplies. Brent futures rose 73 cents, or 0.8 per cent, to $87.73 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $1.04, or 1.3 per cent, to $84.21. Both contracts were on track for their highest closes since October 27.
That increase in U.S. crude futures cut the U.S. diesel crack spread, which measures refining profit margins, to its lowest since May 2023 for a second day in a row. In the U. S., data from the Commerce Department showed the personal consumption expenditures (PCE) price index – the U.S. Federal Reserve’s preferred inflation gauge – moderated in February, with the cost of services outside housing and energy slowing significantly. Analysts said that keeps a June interest rate cut from the Fed on the table.
Lower interest rates reduce the cost of buying goods and services, which could boost economic growth and increase oil demand.
In China, manufacturing activity expanded for the first time in six months in March, according to an official factory survey, supporting oil demand in the world’s largest crude importer.
“Chinese oil demand is arguably the one missing factor outside of geopolitical headlines capable of taking oil prices to the next level,” Bob Yawger, director of energy futures at Mizuho, a bank, said in a note. “Strong summer gasoline demand and a rebound in China oil demand could be the one two punch that support $100 a barrel,” Yawger added.
China also promised to import more high-quality products and services from France, after a European investigation into Chinese electric vehicle exports supported by Paris threatened to spark a tit-for-tat trade dispute between the two countries.
In Japan, optimism in the services sector climbed to a 33-year high in the first quarter on booming tourism and rising profits from price hikes, a central bank survey showed. In Europe, oil demand was firmer than expected, rising 100,000 barrels per day (bpd) on the year in February, Goldman Sachs analysts said, versus its forecast of a 200,000 bpd contraction in 2024. Top oil exporter Saudi Arabia may raise the official selling price (OSP) for flagship Arab Light crude in May after Middle East benchmarks strengthened last month, according to industry sources. In Russia, an OPEC+ member, Deputy Prime Minister Alexander Novak said the country’s oil companies will focus on reducing output rather than exports in the second quarter in order to evenly spread production cuts with other members of OPEC+, which brings together the Organisation of the Petroleum Exporting Countries and allied producers. Drone attacks from Ukraine have knocked out several Russian refineries, which is expected to reduce Russia’s fuel exports. Almost 1 million bpd of Russian crude processing capacity is offline from the attacks, affecting its high-sulphur fuel oil exports that are processed at Chinese and Indian refineries.
Oil prices were rising yesterday as transit disruptions continued following several attacks on ships in the Red Sea.
West Texas Intermediate crude, the U..S. benchmark, was up 1.9 per cent to $74.99, while Brent crude, the international standard, gained 1.8per cent to $80.24. Oil prices have traded lower earlier in the day.
Houthi rebels have attacked multiple commercial ships this month.
Several companies have rerouted or paused their shipments through the area in an effort to avoid conflict.
The U.S. last week announced a 10-nation coalition to counter the attacks in the Red Sea. Following the announcement, shipping giant Moeller-Maersk announced Sunday that it would gradually resume Red Sea shipments. “We are currently working on plans for the first vessels to make the transit and for this to happen as soon as operationally possible,” the company said in a customer advisory.
News from last week that Angola was leaving the Organization of the Petroleum Exporting Countries (OPEC) also continued to pressure oil prices.
Oil price hit a 2019 high above 69 dollars a barrel on Tuesday on the prospect that more sanctions against Iran and further Venezuelan disruptions could deepen an OPEC-led supply cut, and as the market became less worried that demand may reduce.
The United States is considering more sanctions against Iran, whose oil exports have been halved by existing measures, an official said.
A key crude terminal in Venezuela, also under U.S. sanctions, has halted operations again.
Brent crude rose 10 cents to 69.11 dollars a barrel by 0826 GMT, having touched 69.50 dollars, the highest since mid-November. U.S. crude was up 11 cents at 61.70 dollars after rising above 62 dollars for the first time since early November.
“The supply cuts have been there for a while but Venezuela is not improving,” said Olivier Jakob, analyst at Petromatrix. “That is taking a lot of oil away from the market.”
Further supply losses from Iran and Venezuela could widen an OPEC-led production cut that took effect in January, designed to prevent a price-sapping rise in inventories.
Supply from the Organization of the Petroleum Exporting Countries hit a four-year low in March, a Reuters’ survey found, because top exporter Saudi Arabia cut more than it had agreed to and due to the involuntary declines.
This week’s reports on U.S. supplies are expected to show crude inventories fell, a sign that the OPEC curbs are having the impact producers intended.
Six analysts polled by Reuters estimated, on average, that crude stocks fell by 1.2 million barrels in the week to March 29. The first of this week’s supply reports, from the American Petroleum Institute, is due at 2030 GMT.
Oil’s pattern on the price charts could lead to further gains. Brent is trading just below the 200-day moving average and a move above this mark would provide additional technical support, Jakob said.
Healthy data on the world’s biggest economies, the United States and China, also bolstered prices.
Figures showing a rebound in U.S. factory activity in March and a return to growth in Chinese manufacturing eased concern that an economic slowdown could weaken oil demand.
“China’s PMI number was the most significant monthly increase since 2012, which should ease concerns around a potential threat to oil demand,” said
Stephen Innes, head of trading and market strategy at SPI Asset Management.
We are again in the season of oil price unpredictability where oil prices easily rise and fall. This has made RIGZONE to ask experts whether oil will ever reach $100 per barrel.
Oil will hit $100 per barrel again, according to RoseAnne Franco, head of oil and gas at global risk consultancy Verisk Maplecroft.
“It’s a question of when and will it stay there … the level of geopolitical uncertainty we confront today is particularly volatile and precisely the type of conditions that could lead to an oil price shock,” Franco told Rigzone.
“That said, the uncertainty appears to cut both ways as global economic growth, which supports higher oil demand, is vulnerable to heightened geopolitical risk, which erodes it,” Franco added.
Fundamentals don’t appear to support such higher price levels this year, according to Franco. The Verisk Maplecroft representative stated however that “beyond 2020, an oil supply crunch due to the retrenchment in spending in the oil patch coupled with a perfect storm on the geopolitical end could easily trigger another price shock.”
Offering his view, Devin Geoghegan, Genscape’s global director of petroleum intelligence, told Rigzone that “unless electric cars become the unicorn of demand growth deceleration, $100 oil seems highly likely at some point during the next 10 years.” The Genscape director added however that there are “very real headwinds” to reaching that figure again.
“First, stagnant or declining demand could cause an abrupt shift lower in multi-year supply need expectations,” Geoghegan said.
