The Organization of Petroleum Exporting Countries (OPEC) has reported a decline in Nigeria’s oil production following its April Monthly Oil Market Report (MOMR), the country’s crude oil output dropped by 4.37% in March, falling from 1.465 million barrels per day (bpd) in February to 1.401 million bpd
The disclosure was based on data from the April Monthly Oil Market Report (MOMR) by OPEC.
The 64,000-bpd decline widens the gap between Nigeria’s actual production and its OPEC quota of 1.5 million bpd.
The country now produces 6.6% less than its target and remains 32% short of the federal government’s 2025 production goal of 2.06 million bpd.
Persistent issues like underinvestment, aging infrastructure, and widespread oil theft continue to limit production. These structural challenges have made it difficult for the country to sustain stable output levels, despite its large reserves.
Impact on the economy
The falling production, combined with lower international oil prices, poses serious risks to Nigeria’s fiscal stability. Oil exports are a major revenue source for the country, and any reduction in output directly affects government income.
As revenues decline, so do national reserves, making it harder to fund development projects, infrastructure, and essential public services such as education and healthcare. This could further slow economic growth and increase reliance on borrowing.
While Nigeria cannot control global oil prices, it can improve domestic production. Tackling oil theft, encouraging investment, and upgrading infrastructure are key steps to strengthening output and securing long-term revenue.
What you should know
Recently, Nairametrics reported that Nigeria is facing two major economic threats as Brent crude prices tumble below $60 per barrel, and the sudden drop makes the government’s budget deficit even worse.
- The steep fall in oil prices caused by OPEC+ boosting supply and slowing demand around the world sparked concern among government officials and investors alike.
- Data from the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) shows that Nigeria’s daily average crude oil production in February fell by about 5% compared to January. The February production stood at 1.465 million bpd, down from 1.539 million bpd in January. The report also noted that the country recorded a peak production of 1.7 Mbps in February, and the lowest was 1.6 Mbps.
Nigeria’s oil production has been consistently underperforming, driven by deep-rooted challenges in the sector. Oil remains a major source of revenue for the country, and these declines are putting additional strain on the economy.
