Fresh fears over budget 2025 as oil price lowers to $59 per barrel.
Over the weekend, fears over the implementation of Nigeria’s 2025 budget grew as oil prices fell further to $59 per barrel from more than $70 per barrel, the lowest this year.
This is around 15.7% lower than this year’s top price of over than $70 per barrel.
The budget was funded at $75 per barrel for more over two million barrels per day, including condensate. Furthermore, in its April 2025 Monthly Oil Report, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) stated that the country’s March 2025 oil output, including condensate, fell marginally to 1.6 million bpd from 1.7 million bpd in February, falling more than 300,000 bpd short of the budget benchmark.
Oil prices have fallen since last Wednesday, when President Donald Trump of the United States announced sweeping tariffs that are projected to bring the effective US tariff rate to its highest level in more than a century.
Furthermore, checks revealed that the global oil market was harmed as a result of increased production and exports from many nations, even as the Organisation of Petroleum Exporting Countries (OPEC) and its allies, also known as OPEC+, moved to phase out their voluntary oil output cuts by increasing production by 411,000 barrels per day in May. Mazi Colman Obasi, the National President of the Oil and Gas Service Providers Association of Nigeria (OGSPAN), stated, “The oil market has grown increasingly unpredictable in recent times due to forces beyond Nigeria. To create adequate foreign cash, the nation must begin to seek beyond crude oil.”
Similarly, Olatide Jeremiah, Chief Executive Officer of Petroleum Price NG, stated, “We have a major decline in crude oil prices, which is capable of affecting the execution of the nation’s 2025 budget.”
Farouk Ahmed, Chief Executive Officer (CEO) of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), stated, “As consumers, we are happy that the price is coming down, but as a nation, it is not good for our economy because our revenue inflow is also impacted.”
“Most crucially, what is destabilising the market is President Trump’s unreliability in communicating his policies. He’s moving today. He will reverse his decision tomorrow. Consequently, projecting the next level has been difficult.
“Recently, as we all know, the global oil market – not just the oil market, but the global economy – has been a little volatile as a result of the new American government’s tariff policy, which is aimed not only at China but at the entire world.”
Investors and traders in the oil and gas industry, as well as the world economy, are experiencing such volatility that some are day trading.
That means you trade today. You should close your trades before the end of the day because you never know how tomorrow’s policy will impact the market.
“So, the crude oil and petrol products market continues to have a downward trajectory because of these inconsistencies and policies of the government of the United States, and the key aspect of it is the aspiration of the American president to ensure that the crude oil pricing, or the crude oil price, comes down to maybe below $50 a barrel; that’s why he encourages more exploration in his country.”
He further stated, “We are pleased as consumers of the derivatives of product pricing that the price is down, but when you look at it worldwide as a nation, it is not good for our economy since our revenue inflow is also affected.
“If the crude oil price drops in one day from roughly $73 a barrel to $60, you can see that our earnings from crude oil production suffers significantly.
“This volatility will continue because as recently as yesterday, when President Trump again exempted some sectors from tariffs, particularly to China, like in terms of vehicular tariffs, you saw the market again start to go up.”