Crude oil prices continued their downward trend this week as market anxieties over a potential global recession deepened, amplified by concerns over increased supply from the OPEC+ alliance.
At the time of reporting, Brent crude was trading just below $64 per barrel, while West Texas Intermediate (WTI) hovered around $60.54 per barrel, both marking a decline of over 2% compared to Friday’s closing prices.
Last week’s 7% drop was largely attributed to escalating U.S.-China trade tensions, following China’s imposition of retaliatory tariffs on U.S. goods. The new levies matched the U.S. rate of 34% and heightened concerns over weakening global energy demand.
“The main driver of the price slide is growing unease that the tariff conflict could trigger a broader economic slowdown,” said Satoru Yoshida, a market analyst at Rakuten Securities, in a note to Reuters. He also pointed to upcoming increases in output by OPEC+ members as an additional factor pressuring prices.
ING’s commodities team also cited the OPEC+ decision as pivotal, listing several contributing factors: continued U.S. sanctions on Venezuela and Iran, pressure from Washington on Saudi Arabia to temper prices, and internal enforcement measures aimed at curbing overproduction by member states such as Iraq and Kazakhstan.
Reflecting these developments, ING revised its 2025 Brent price forecast from $74 to $72 per barrel. “While we currently expect a modest supply deficit through the second and third quarters of 2025, this outlook is subject to rapid change depending on production decisions and evolving demand patterns,” said Warren Patterson, Head of Commodity Strategy at ING.
Goldman Sachs issued a more aggressive revision, lowering its Brent forecast for 2025 to $69 per barrel and WTI to $66, citing deteriorating demand expectations.
Yoshida offered a particularly bearish scenario, warning that WTI could fall as low as $50 per barrel if negative market sentiment persists and investor confidence continues to erode.
This extended price downturn underscores the oil market’s continued vulnerability to geopolitical disruptions, trade policy shifts, and supply-demand imbalances. As traders and analysts monitor further developments, volatility is likely to remain a defining feature of global energy markets in the months ahead.
Revenue Risks for Nigeria Amid Sliding Prices
For Nigeria, the prolonged slump in oil prices spells a significant fiscal risk. The country’s 2025 national budget benchmarks crude oil at $75 per barrel. With Brent now below $64, Nigeria faces a widening revenue shortfall that could derail public spending plans and strain an already fragile economy.
Oil revenues account for over 70% of Nigeria’s foreign exchange earnings and nearly half of the government’s income. A prolonged dip below the benchmark could force the government to increase borrowing, cut spending, or both each with profound implications for development and economic stability.
How U.S. Tariffs Could Tip Nigeria Toward Recession
- Revenue Loss: With lower oil prices, Nigeria earns less from crude exports, impairing its ability to meet budgetary obligations.
- Currency Pressure: Reduced inflows from oil weaken the naira, potentially spurring inflation and increasing the cost of imports.
- Investor Uncertainty: Political and trade tensions reduce investor confidence, delaying foreign direct investment and project financing.
- Debt Vulnerability: Lower revenues may increase Nigeria’s reliance on debt, deepening fiscal fragility.
- Widening Trade Deficit: Declining export earnings amid high import costs could increase Nigeria’s trade imbalance.
As the global oil market navigates uncertainty, Nigeria remains particularly exposed. The combination of geopolitical maneuvering, price volatility, and economic misalignment underscores the urgent need for diversification and more resilient fiscal strategies.
