Nigeria’s oil output could top 1.7mbpd, NESG sees fiscal relief from higher prices

Nigeria’s crude oil production is expected to exceed 1.7 million barrels per day (mbpd) in the second half of 2026, while higher crude oil prices could improve the country’s fiscal outlook.

This is according to the Nigeria Economic Summit Group’s (NESG) 2026 Half-Year Outlook Report.

The projection is based on expectations of improved oil sector fundamentals, including reduced crude oil theft, enhanced pipeline security and renewed upstream investment following the resumption of oil block licensing.

What the report is saying

According to the report, NESG expects global developments, particularly geopolitical tensions and their impact on energy markets, to remain a key determinant of Nigeria’s economic performance in the second half of 2026.

NESG said as a net oil exporter, Nigeria could benefit from elevated crude oil prices if supply disruptions persist or geopolitical tensions in the Middle East intensify.

• NESG projects crude oil prices to average between $70 and $80 per barrel in H2 2026 under its baseline scenario.
• The group said prices could exceed $100 per barrel if geopolitical tensions in the Gulf region escalate further.
• The projected baseline oil price remains above Nigeria’s 2026 budget benchmark of $64.85 per barrel.
• “Taken together, these global and domestic assumptions underpin our projections for Nigeria’s economic growth, inflation, exchange rate, and external reserves in the second half of 2026,” the report noted.

The projected increase would represent continued progress in restoring Nigeria’s oil production capacity, although output would still be below the 2026 budget assumption of 1.84 million bpd.

NESG said the combination of higher crude prices and improved oil production could create additional fiscal space for the Federal Government.

More insights

Nigeria’s crude oil production remained above 1.5 million barrels per day for the third consecutive month in July 2026, despite declining from the previous month.

• The latest data from the Organization of the Petroleum Exporting Countries (OPEC) showed that Nigeria’s crude oil output fell to 1.505 million bpd in July from 1.555 million bpd in June.
• The cartel’s data shows that Nigeria’s average crude oil production stood at 1.525 million bpd in Q2 2026.
• This was higher than the 1.388 million bpd recorded in Q1 2026.
• July production declined by 50,000 bpd from June.

Nigeria’s oil production has remained below the levels required to fully meet the government’s budget assumptions, with crude oil theft, pipeline security challenges and underinvestment weighing on output.

What you should know

Earlier this year, NUPRC declared the nation’s total petroleum reserves at 37.01 billion barrels of crude oil and condensate, alongside 215.19 trillion cubic feet (TCF) of natural gas as of January 1, 2026.

Also, the Nigerian National Petroleum Company Limited said it plans to grow Nigeria’s gas reserves from the current 210 trillion cubic feet to about 600 trillion cubic feet.

The agency recently stated that Nigeria remains on course to achieve its target of producing 3 million barrels of crude oil per day by 2030.