Nigeria’s crude oil blends outperformed the global benchmark on Tuesday, closing at an average of $68 per barrel—a full $4 above Brent Crude, which opened mid-week trading at $64 per barrel. This development comes amid rising global economic uncertainty, geopolitical tensions, and declining oil demand projections.
Despite this brief gain, the Nigerian oil sector faces a complex web of challenges. Farouk Ahmed, CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), warned that Nigeria’s overdependence on oil exports leaves it vulnerable to external shocks and price volatility.
“Although we, as consumers, appreciate the price drop, it is detrimental to our economy as our revenue inflows are also affected,” Ahmed noted during an energy forum on Tuesday.
Analysts have attributed much of the current market instability to U.S. President Donald Trump’s inconsistent economic policies, especially sweeping tariffs targeting major trade partners such as China. These measures, often reversed or adjusted with little warning, have triggered investor uncertainty and rattled global markets.
Meanwhile, the International Energy Agency (IEA) revised its global oil demand growth forecast downward—from 1.1 million barrels per day last month to 730,000 barrels per day—fueling bearish sentiment across oil markets.
Back home, Nigeria’s oil output is under threat from resurgent militant activities in the Niger Delta. The Movement for the Emancipation of the Niger Delta (MEND) and the Liberation Army of the Niger Delta both claimed responsibility for recent attacks on oil pipelines, including a major supply line in Bayelsa State.
Oando Energy confirmed that three of its pipelines were hit in separate incidents over the past week, significantly disrupting operations. The attacks are reportedly in response to President Bola Tinubu’s declaration of a state of emergency in Rivers State, where political tensions have escalated following the suspension of Governor Siminalayi Fubara and other top officials.
The instability has prompted major financial institutions—UBS, BNP Paribas, and HSBC—to revise their oil price projections downward. Experts warn that countries like Nigeria, which rely heavily on crude exports, must brace for revenue shortfalls and rethink their long-term fiscal strategies.
Despite these challenges, Nigeria is expanding its crude portfolio. In April, the country launched Obodo, a new medium-sweet crude grade targeting the European market. According to Argus Media, this addition joins other flagship grades like Forcados, Escravos, and Bonga, aiming to diversify export options and boost earnings.
While Nigerian crude may have outpaced Brent in price this week, analysts caution that without structural reforms, improved security, and a more diversified economy, such gains may be short-lived in the face of global headwinds.
