Nigeria’s 2025 budget is facing a potential threat as the country’s crude oil blend, Bonny Light, is currently selling below the national budget’s benchmark of $75 per barrel. The budget is heavily reliant on crude oil sales, with an expected price of $75 per barrel and production set at 2.06 million barrels per day.
The global crude oil market has seen a decline in prices, which affects Nigeria’s premium crude grades, including Bonny Light, Forcados, and Qua Iboe. Although these grades are somewhat shielded from the global price drop, selling at around $71 per barrel, the overall decline in global prices reduces this advantage.
Recently, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed to increase oil output by 137,000 barrels per day starting next month. This decision is part of a larger strategy to focus on market share ahead of pricing. The group plans to release an additional 1.65 million barrels per day, which was initially intended to be held back until the end of the following year.
OPEC+ had previously committed to restoring 2.2 million barrels per day through a series of accelerated hikes between April and September, a year ahead of schedule. The decision to open the taps has been justified by various factors, including attempts to rein in overproducing nations and recover sales volumes lost to competitors.
Crude oil sales account for 80% of Nigeria’s foreign exchange and at least half of the government’s revenue, making the country highly vulnerable to fluctuations in the global oil market. Nigeria has been actively lobbying OPEC for a higher quota, aiming to reach 2 million barrels per day by 2027. The country exceeded its 1.5 million barrel per day quota in June and July 2025, reflecting the success of policies aimed at encouraging investment and boosting production.
The development comes as Goldman Sachs predicts that Brent crude prices may drop to the low $50s per barrel next year. OPEC+ has stated that it will gradually return all or a portion of the 1.65 million barrels, depending on market conditions. The oil cartel has emphasized that it may halt or undo earlier hikes if necessary. According to delegates, the supply will be added monthly until September of the following year.
The potential drop in crude oil prices poses significant risks to Nigeria’s economy, highlighting the need for the country to diversify its revenue streams and reduce its dependence on oil sales. As the global oil market continues to evolve, Nigeria’s ability to adapt to changing market conditions will be crucial in mitigating the risks associated with fluctuating oil prices.