Nigeria’s crude oil production fell by 4.37% in March, widening the gap between the country’s actual output and its assigned quota by the Organization of Petroleum Exporting Countries (OPEC). According to the April Monthly Oil Market Report (MOMR) released by OPEC, Nigeria’s production dropped from 1.465 million barrels per day (bpd) in February to 1.401 million bpd in March, a decrease of 64,000 bpd.
This decline leaves Nigeria producing 6.6% below its OPEC quota of 1.5 million bpd, and a significant 32% short of the federal government’s 2025 production goal of 2.06 million bpd.
Structural Challenges Undermining Production
Despite having substantial crude oil reserves, Nigeria continues to face deep-rooted obstacles that prevent it from achieving consistent output growth. Key among these are:
- Underinvestment in upstream operations
- Aging and poorly maintained infrastructure
- Rampant oil theft and sabotage of pipelines
These issues have eroded the sector’s efficiency and continue to prevent stable production levels. The persistent shortfalls come even as other OPEC+ countries scale up output to capture more of the global market share.
Implications for Nigeria’s Economy
The decline in crude oil output comes at a time when global oil prices are also weakening. For a country where petroleum exports are a primary revenue source, this double blow could seriously undermine fiscal stability.
Lower production means reduced export volumes and, by extension, lower dollar inflows into national reserves. This restricts the government’s ability to fund critical sectors such as infrastructure, education, healthcare, and public service delivery. It also increases Nigeria’s reliance on borrowing to finance its budget deficits, compounding debt servicing challenges.
Recent Price Shock Worsens Fiscal Pressure
As previously reported by Nairametrics, Nigeria is facing two concurrent threats: falling oil production and plunging oil prices. Brent crude has now fallen below $60 per barrel, intensifying concerns among policymakers and investors.
The price slump has been triggered by a combination of OPEC+ boosting supply and weakened global demand, putting further pressure on oil-dependent economies like Nigeria. With revenues shrinking, budgetary shortfalls are expected to widen unless swift interventions are made.
Nigeria’s Output Continues to Underperform
Data from the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) shows that crude oil production in February had already declined by 5% compared to January. Output fell from 1.539 million bpd in January to 1.465 million bpd in February, further confirming a consistent downward trajectory.
The report noted that the country recorded a peak production of 1.7 million bpd in February, with the lowest level at 1.6 million bpd, a range still far below national targets.
Urgent Reforms Needed
To reverse the trend, Nigeria must confront its domestic challenges head-on. Priority actions include:
- Curbing oil theft through better surveillance and enforcement
- Upgrading aging infrastructure
- Creating incentives for private sector investment in the upstream sector
With the right reforms and stronger governance, Nigeria could begin to recover lost output and reduce its vulnerability to global oil price shocks.
