Nigeria’s oil sector entered 2025 with mixed signals. Crude oil production and exports have moved almost in the same rhythm rising and falling together while global oil prices continue to challenge the federal government’s fiscal projections. Data from the Central Bank of Nigeria (CBN) reveal that between January and July, Nigeria battled to keep production above 1.5 million barrels per day (mbpd), even as export volumes and oil prices strained under external and internal pressures.
Production and Exports: A Delicate Balance
| Month | Produced (mbpd) | Exported (mbpd) | Movement |
|---|---|---|---|
| January | 1.54 | 1.09 | Strong start |
| February | 1.47 ⬇ | 1.02 ⬇ | Decline sets in |
| March | 1.40 ⬇ | 0.95 ⬇ | Lowest so far |
| April | 1.49 ⬆ | 1.04 ⬆ | Partial rebound |
| May | 1.45 ⬇ | 1.00 ⬇ | Slipped again |
| June | 1.51 ⬆ | 1.06 ⬆ | Recovery phase |
| July | 1.51 ↔ | 1.06 ↔ | Stability holds |
The numbers show a sector still struggling for consistency. In March, Nigeria’s output dropped to its lowest this year at 1.40 mbpd, pulling exports down to 0.95 mbpd. But by April, both figures climbed, showing how quickly production challenges translate into export performance.
Interestingly, Nigeria exports roughly 70 percent of its output. For example, in January, 1.09 mbpd of the 1.54 mbpd produced left the country, while in July, the export ratio stood at about 70.2 percent. This narrow variation underlines the fact that local refining capacity remains weak, with most crude destined for foreign markets.
Oil Prices Drag Revenue Hopes
Bonny Light, Nigeria’s flagship crude, has also posed a headache in 2025.
- January: $80.76
- February: $77.08 ⬇
- March: $74.44 ⬇
- April: $69.07 ⬇
- May: $65.90 ⬇
- June: $73.50 ⬆
- July: $73.18 ⬇
The federal budget for 2025 is benchmarked at $75 per barrel, yet prices have struggled to stay above that line. From February to May, the benchmark slipped out of reach, with May’s $65.90 representing the sharpest revenue squeeze. Although June brought a rebound, July’s softening showed just how volatile the oil market remains.
For Nigeria, this means that even when exports hold steady, earnings can be undercut by weak global prices. This double pressure exposes the economy’s dependence on oil and the risks tied to external shocks.
Why the Fluctuations?
Persistent theft and vandalism
Pipeline vandalism and crude theft continue to undermine production gains. The deep fall in March coincided with disruptions around the Forcados and Qua Iboe terminals, exposing how fragile output is when security lapses.
Refining gaps and domestic use
With Nigeria’s refineries still not operating optimally, the country exports most of its crude. Any slight shift in local demand or refining test runs affects exportable volumes, but not enough to change the overall pattern of dependence on foreign sales.
Price swings from global politics
The Russia-Ukraine war, OPEC+ supply strategies, and uncertain demand from China have all weighed on crude prices. Nigeria, with limited control over these external forces, has felt the impact directly on its revenue streams.
Investment and production capacity
Nigeria still produces below its potential. Decades of underinvestment and policy uncertainty have capped capacity at around 1.5 mbpd, far from the 2.0 mbpd levels the country once achieved. However, fresh commitments like ExxonMobil’s $1.5 billion deepwater investment signal hope for stronger output in the medium term.
The Road Ahead
Nigeria’s oil story in 2025 is one of fragility mixed with potential. If production can hold steady above 1.5 mbpd and exports remain around 1.06 mbpd, the challenge will then shift to prices. Unless Bonny Light stays above the $75 benchmark, government revenues will remain under pressure.
Looking forward, three scenarios stand out:
- Base case: Production hovers at current levels, exports follow, and oil prices stay between $70 and $75 — just enough to keep the budget afloat.
- Optimistic case: Security improves, investments materialise, and prices rise above $80, giving Nigeria a revenue cushion.
- Downside case: Renewed global shocks push prices below $70 while theft persists, forcing the government into more borrowing.
Final Word
CBN’s figures for the first seven months of 2025 tell a simple but important truth: Nigeria’s oil sector is still highly vulnerable. Production and exports mirror each other closely, while prices largely dictate whether revenue targets are met.
Until Nigeria strengthens local refining, secures its pipelines, and attracts consistent upstream investment, this cycle of fragile gains and painful slips will remain.
