Nigeria’s recent gains in curbing crude oil theft could ease pressure on the foreign exchange market, boost fiscal revenues, and lift investor confidence, according to a new report by Afrinvest.

Citing data from the Nigerian Upstream Petroleum Regulatory Commission, Afrinvest said crude oil losses dropped to 9,600 barrels per day in July 2025—the lowest in 16 years. This marks a 15 per cent improvement from the 2024 average of 11,300 bpd and a dramatic 90.7 per cent drop from 102,900 bpd in 2021.

The investment firm credited the turnaround to reforms under the Petroleum Industry Act of 2021, tighter regulatory oversight, metering audits across upstream facilities, and stronger collaboration among regulators, security agencies, host communities, and operators.

Afrinvest noted that while Nigeria’s crude output of 1.51 million bpd in July fell short of the 2025 budget target of 2.01 million bpd, reduced theft means more oil is available for export and revenue for the Federation Account.

With crude accounting for about 85 per cent of Nigeria’s foreign exchange earnings, the firm said sustained progress on theft reduction could provide critical support for the naira and government finances.

“Higher export volumes, stemming from reduced crude oil losses, should result in improved FX liquidity and external reserves, thereby easing pressure on the naira,” the report stated.

The naira has gained 2.4% year-to-date in 2025, trading at ₦1,501.50 per dollar, driven mainly by Central Bank of Nigeria reforms.

Afrinvest added that the steep drop in crude losses could help restore investor confidence in Nigeria’s oil and gas industry.

It noted that years of divestments by international oil companies were largely driven by security and operational risks tied to theft and pipeline vandalism.

The recent progress, the firm said, could revive investment appetite in the upstream sector, boost production prospects, and reinforce Nigeria’s fiscal and external buffers.

The firm concluded that although output remains below the Federal Government’s targets, the decline in oil theft marks a structurally positive shift for the industry and the wider economy.