Global oil prices have rebounded sharply, with Brent crude climbing back above $70 per barrel due to geopolitical tensions and supply uncertainties in energy markets.
For Nigeria, Africa’s top oil producer, this rally presents both opportunities and risks as the country seeks to stabilize its finances and attract investment into its energy sector.
Russia’s decision to tighten export restrictions, including a full ban on gasoline exports and extended limits on diesel shipments, has raised concerns about refined product availability globally.
Meanwhile, questions surround OPEC+ discipline, as the group has rolled back its voluntary production cuts of 2.2 million barrels per day, but analysts doubt all producers will fully restore supply, creating a price cushion that lifted Brent back to the $70 threshold.
For Nigeria, OPEC+ compliance is a familiar challenge. The country has struggled to meet production targets due to theft, underinvestment, and operational issues. However, higher oil prices provide Abuja with breathing space to shore up revenues.
In August, Nigeria’s crude oil production slipped below its OPEC quota, averaging 1.434 million barrels per day, down from 1.507 million bpd in July, according to OPEC data. This figure is the lowest in six months and below Nigeria’s OPEC allocation of about 1.5 million bpd.
“We will promise what we can deliver, and we will deliver on our promise,” said Bayo Ojulari, Group Chief Executive Officer of NNPC Limited, reflecting on the government’s efforts to increase oil production.
Nigeria had shown signs of recovery in June and July, meeting its OPEC quota, but the August decline has raised concerns about achieving its 2027 targets of 2 million barrels daily.
In a related development, Iraq has struck deals with eight international oil companies to restart crude exports through the Kirkuk-Ceyhan pipeline, expected to ease some supply concerns.
However, wider geopolitical tensions across the Middle East and Eastern Europe continue to inject volatility into the market, potentially keeping prices elevated and impacting Nigeria’s domestic fuel costs due to its reliance on refined product imports.
