Nigeria forfeited an estimated N1.76 trillion in potential crude oil revenue after repeatedly failing to meet production quotas set by the Organisation of the Petroleum Exporting Countries between January 2025 and January 2026.
Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that the country’s crude oil output fell below the 1.5 million barrels per day (mbpd) OPEC benchmark in nine months of 2025 and again in January 2026, despite relatively stable global crude prices.
Nigeria exceeded its quota only in January, June, and July 2025, producing about 1.54 mbpd in January and slightly above target levels in mid-year. However, production declined in subsequent months, hitting its lowest level in September at 1.39 mbpd — a deficit of roughly 110,000 barrels per day.
Mounting production gaps
Across the nine underperforming months in 2025, Nigeria recorded a cumulative shortfall of about 18.7 million barrels. After accounting for minor surpluses earlier in the year, the net deficit stood at approximately 16.85 million barrels.
The trend continued into 2026, with January production averaging 1.459 mbpd — about 41,000 barrels below the daily quota — translating to a monthly deficit of roughly 1.27 million barrels. Altogether, Nigeria missed an estimated 18.12 million barrels over the 13 months.
Using an average crude price of $72.08 per barrel — derived from figures by the Central Bank of Nigeria — the production gap equates to an estimated revenue loss of $1.31 billion, or about N1.76 trillion at an exchange rate of N1,353 to the dollar.
This occurred even as Nigeria produced about 530.41 million barrels in 2025, generating gross oil revenue estimated at N55.5 trillion before deductions for production costs, joint venture obligations, and operational expenses.
Structural challenges persist
Industry analysts attributed the recurring shortfalls to deep-seated structural issues, including oil theft, pipeline vandalism, security concerns in the Niger Delta, infrastructure limitations, and operational inefficiencies across oil fields.
Energy expert, Wumi Iledare, noted that Nigeria’s production problem was not driven by oil prices but by its inability to convert capacity into actual output.
He stressed that meeting targets would require stronger asset security, reduced operational disruptions, faster regulatory approvals, and a more stable investment environment.
“Ambitious projections alone will not close the gap. Practical, on-ground interventions are essential to ensure existing fields operate at full capacity,” he said.
Similarly, economist Segun Ajibola said crude output depends on multiple factors beyond government control, including joint-venture cooperation, global market dynamics, and operational conditions within the industry.
Budget implications and outlook
The persistent production gap casts a shadow over Nigeria’s 2026 fiscal outlook, as the Federal Government has projected daily oil output of 1.84 mbpd and benchmarked crude prices at $64.85 per barrel.
Although output rose slightly from 1.42 mbpd in December 2025 to about 1.46 mbpd in January 2026, it still fell short of OPEC’s quota — marking the sixth consecutive month of underperformance.
Meanwhile, the newly appointed NUPRC chief executive, Oritsemeyiwa Eyesan, pledged to prioritise production optimisation, regulatory efficiency, and sustainable operations to boost output.
She said the strategy aligns with President Bola Tinubu’s plan to raise Nigeria’s crude production to two million barrels per day by 2027 and three million barrels per day by 2030.
Analysts, however, warn that unless structural constraints are urgently addressed, Nigeria may continue to lose significant revenue opportunities despite favourable global oil prices.
