Brent crude falls to $59, triggering widespread concern among oil marketers while offering short-term relief to Nigerian fuel consumers. The decline exposes the country’s fiscal vulnerabilities and sharpens the urgency for economic diversification.
Global Oil Prices Tumble on OPEC+ Supply Surge
Brent crude falls to $59.15 per barrel today, a 3.49% plunge, its lowest since April. West Texas Intermediate (WTI) crude also declined by 3.81% to $56.07. Murban crude dropped 4.26% to $58.48. In contrast, natural gas prices climbed 1.46% to $3.683.
OPEC+ triggered this downward spiral by increasing output by 411,000 barrels per day in June. This supply boost flooded the market. Saudi Arabia’s focus on protecting market share over price stability further eroded confidence.
Meanwhile, escalating U.S. trade tariffs stoked fears of slowed global demand. Major agencies IEA, OPEC, and the EIA cut oil demand growth forecasts for 2025 by up to 400,000 barrels daily.
Nigeria Faces Budget Blow from Brent Price Crash
Nigeria’s 2025 budget rests on an assumed Brent crude price of $75. Now that Brent crude falls to $59, the country stares at a severe revenue gap. The Central Bank of Nigeria reports oil contributes over 80% of export earnings.
“This is a wake-up call,” said Dr. Chijioke Eke, energy economist at the University of Lagos. “Nigeria’s over-dependence on oil leaves us dangerously exposed. The naira already weakens, this will worsen our balance of payments.”
Temporary Fuel Relief vs. Long-Term Risk
While fuel importers and sectors like aviation may gain from cheaper oil, the wider economy remains at risk. The Dangote Refinery, operational since September 2024, cut daily petrol imports from 50.8 million to 28.7 million litres. But with Brent crude falling to $59, imported fuel now threatens its profit margins.
Domestic refining faces downward price pressure, jeopardising gains in energy independence.
Sabotage, Debt and Economic Strain Mount
Supply chain attacks, like the recent Bayelsa pipeline sabotage reported by Oando Plc, worsen instability. Meanwhile, subsidy funding and infrastructure investments face collapse if oil prices stay low.
“We’re caught in a perfect storm,” said Amina Yusuf, a trader in Abuja. “Fuel might get cheaper, but if the government fails to fund services, everyone suffers.”
Analysts expect increased borrowing. Barclays revised its Brent forecast down to $66 for 2025, citing a likely surplus of 1 million barrels per day. The IEA predicts the slowest global demand growth in five years.
Experts Call for Diversification as Brent Declines
Dr. Eke urged immediate reforms. “Nigeria must shift to agriculture, tech, and renewables,” he stated. “Brent crude falls to $59 today. Oil won’t save us tomorrow.”
As the price slump ripples through the economy, Nigeria must act quickly. The gains at the pump are real, but the risks run deeper.
