Nigeria may have forfeited an estimated ₦28.3 trillion in potential annual revenue despite the recent surge in global crude oil prices, as production levels continue to fall below target, according to Dele Oye, Chairman of the Alliance for Economic Research and Ethics (AERE).
Oye said the rally in global oil prices, driven by ongoing geopolitical tensions in the Middle East, has created a significant revenue window for oil-producing countries, but Nigeria has been unable to fully benefit due to persistent production shortfalls.
Brent crude has traded between $102 and $114 per barrel, well above Nigeria’s budget benchmark of $64.85, leaving a price premium of $37 to $49 per barrel. Based on this margin, he noted that Nigeria could have realised substantial additional earnings if output levels had matched expectations.
However, the country’s production has remained constrained at about 1.46 million barrels per day, compared to a target of 1.84 million barrels per day, resulting in a shortfall of roughly 380,000 barrels daily.
According to Oye, the gap has limited Nigeria’s ability to translate higher oil prices into increased revenue, even as other producing nations capitalise on the global price rally. He added that a significant portion of Nigeria’s crude is already tied to forward contracts, debt servicing arrangements, and refinery supply commitments, further restricting the volume available for spot sales.
The development reflects a recurring pattern in Nigeria’s oil sector, where favourable global market conditions do not necessarily translate into proportional revenue gains due to structural inefficiencies and operational constraints.
He also pointed to previous market cycles, including the period following the Russia-Ukraine conflict, when crude prices exceeded $110 per barrel for months but Nigeria recorded limited gains due to similar production challenges.
Although the Nigerian National Petroleum Company Limited has indicated plans to increase output by about 100,000 barrels per day, the additional volume remains insufficient relative to the existing gap.
Oye stressed that addressing production constraints is critical for Nigeria to take advantage of elevated crude prices and improve fiscal outcomes. Without a significant increase in output, he warned that the country risks continuing to miss out on potential windfalls during periods of strong global oil markets.