Nigeria’s oil production is expected to record a modest uptick in 2026, buoyed by infrastructure improvements and incremental field output.
This is according to a new outlook by BMI, a Fitch Solutions company titled “Rebound in domestic demand will drive Nigerian economy in 2026”.
The firm forecasts that total liquid hydrocarbons will average 1.73 million barrels per day (b/d) next year, representing a 1.9% rise from the estimated 1.70mn b/d in 2025 and surpassing the country’s official OPEC production quota of 1.50mn b/d.
Nairametrics reported that Nigeria has fallen short of meeting its OPEC-assigned production quota for the third consecutive month—the last time the country met its target was in July 2025.
Nigeria’s crude oil output rose only marginally in October, increasing to 1.401 million barrels per day (bpd) from the 1.39 million bpd recorded in September.
OPEC data shows that Nigeria averaged 1.444 million bpd in the third quarter (Q3) of 2025, marking a decline from the 1.481 million bpd recorded in Q2 and 1.468 million bpd in Q1.
These figures demonstrate Nigeria’s persistent challenges in sustaining a full production recovery, despite fresh investments, renewed security efforts, and ongoing government interventions aimed at stabilising the upstream sector.
However, BMI attributes the anticipated increase to midstream infrastructure upgrades, ongoing debottlenecking efforts, and additional volumes from smaller oil fields.
Operational disruptions at Dangote refinery could force a rebound in fuel imports
The report also highlights the significant impact of the Dangote Refinery, which has already reduced Nigeria’s dependence on imported petroleum products through 2025, easing pressure on foreign exchange demand.
The report noted, “The Dangote refinery has significantly reduced Nigeria’s reliance on imported fuel through 2025 and improved foreign exchange liquidity. While we expect this to continue in 2026, any operational delays or disruptions would keep fuel imports higher-than-expected, worsening FX pressures and inflation, which would dampen Nigeria’s growth outlook.”
Beyond the oil and refining sectors, BMI flags Nigeria’s deteriorating security environment as a mounting threat to growth. The country has experienced a sharp rise in kidnapping incidents in 2025, placing additional strain on an already fragile security landscape.
According to the analysts, further deterioration would likely disrupt both agricultural production and oil output, two of the nation’s most critical growth drivers. Increased insecurity would also deter investment and compel the government to allocate more resources to security operations, leaving fewer funds available for infrastructure, social programmes, and development initiatives.
On the external front, BMI warns that geopolitical tensions could amplify economic risks. Should relations between Nigeria and the United States worsen in 2026—particularly in the wake of allegations by U.S. President Donald Trump regarding unsubstantiated claims of Christian persecution—Washington could consider punitive economic measures such as higher tariffs or even sanctions.
Such actions, BMI observes, would threaten Nigeria’s oil exports, restrict access to U.S. financing and markets, and undermine investor confidence.
What you should know
In its latest report, the Nigerian National Petroleum Company Limited (NNPC Ltd) said crude oil production experienced a slight dip, falling to 1.58 million barrels of oil per day (mmbopd) in October from 1.61 mmbopd in September.
The report shows that production hit 6,997 million standard cubic feet per day (mmscf/d) in October, up from 6,284 mmscf/d in September.
Gas sales, reported on an M-2 basis, climbed to 4,713 mmscf/d, marking a significant increase from 3,443 mmscf/d recorded in the previous month.
