Crude Oil Price Crash Threatens Revenue, Naira Stability

Olaitan SodiqMay 5, 202517

Nigeria’s Crude Oil Production Increases to 1.41mbpd

Brent crude prices have plummeted to $59.25 per barrel, threatening Nigeria’s economy.
Nigeria could lose up to N19.6 trillion in projected oil revenue, widening the fiscal deficit.

Nigeria’s economy is facing twin macroeconomic shocks as Brent crude prices plunge below $60 per barrel, destabilizing the country’s fragile exchange rate regime and widening the fiscal deficit.

The sharp drop in oil prices, driven by accelerated OPEC+ supply increases and weakening global demand, has triggered anxiety in government circles and among investors.

ATTENTION: Click “HERE” to join our WhatsApp group and receive News updates directly on your WhatsApp!

According to Nairametrics research, Nigeria could lose up to N19.6 trillion in projected oil revenue if current trends persist through the year.

This potential shortfall is a direct consequence of lower-than-budgeted oil prices, underwhelming production, and a weaker exchange rate. The fiscal deficit could balloon from the planned N13 trillion to as much as N30.79 trillion.

Joyce Chang, Chair of Global Research at JPMorgan Chase, lauded Nigeria’s reform progress but noted that the external environment had deteriorated.

“We’re now dealing with a potential 3% of GDP tax effect from recent U.S. tariffs,” she said. “Nigeria has made strides, but oil price volatility remains a key risk.”

The government is adjusting to the new reality, with Minister of Finance Wale Edun stating, “The oil price drop is below the 2025 budget, and the government is adjusting to the actual realities on the ground.”

A subcommittee under the Economic Management Team (EMT) has been tasked with scenario modeling to revise fiscal projections and recommend appropriate responses.

OPEC+ decisions further complicate Nigeria’s outlook, with the bloc planning to reintroduce 2.2 million barrels per day of previously withheld supply by October.

Market forecasts project Brent at $66 per barrel in 2025 and $60 in 2026, with most global banks expecting oil prices to remain below $60 into the midpoint of a potential second Trump presidency.