By Atoyebi Nike
The Organization of Petroleum Exporting Countries and allies (OPEC+) has approved an accelerated release of crude oil into the market, raising output by 137,000 barrels per day from next month, in a shift that threatens Nigeria’s fiscal stability.
The hike is part of a 1.65 million barrels per day tranche originally reserved for late 2026 but now set for gradual release through September 2026. Officials said supply levels could be adjusted or reversed depending on market conditions.
Analysts warn the decision comes as global demand weakens, particularly in China, while production surges in the Americas. The International Energy Agency forecasts a record supply glut in 2026, while Goldman Sachs projects Brent crude could fall to the low $50s per barrel.
Nigeria’s 2025 budget is pegged on $75 per barrel and 2.06 million barrels daily production, but its premium crude grades, including Bonny Light, Forcados, and Qua Iboe, are currently trading around $71, below target. The country has struggled to sustain output near 1.5 million barrels per day, despite recent gains.
A prolonged dip in prices could swell Nigeria’s fiscal deficit to 4.3-4.4% of GDP, weakening revenue flows that rely on oil for 80% of foreign exchange and half of government income.
Despite improved security and rising local demand from the Dangote Refinery, OPEC remains hesitant to raise Nigeria’s quota. Abuja hopes to push capacity to 2 million barrels daily by 2027, citing tax incentives and a clampdown on oil theft.
Meanwhile, Indian Oil Corporation (IOC) purchased two million barrels of Nigerian crude (Agbami and Usan grades) from TotalEnergies, alongside one million barrels of Das crude from Shell. The cargoes, due in Indian ports from late October, were bought free-on-board, contrasting with recent IOC acquisitions of U.S. West Texas Intermediate.
India, the world’s third-largest oil consumer, has cut back on Russian crude imports following U.S. pressure, turning more to West African suppliers. The move underlines Nigeria’s continued relevance in Asian markets despite global oversupply fears.
