🛢️ #GlobalOilPrices Fall Below Nigeria’s $64.85 Budget Benchmark What It Means for 2026Global oil prices have dipped below the crucial price Nigeria pegged in its 2026 budget, stirring fresh concerns about fiscal strain for Africa’s largest economy.
On Wednesday, Brent crude the international benchmark traded around $64 per barrel, undercutting the $64.85 per barrel benchmark set in Nigeria’s 2026 fiscal plan. Meanwhile, US West Texas Intermediate (WTI) crude fell below $60 per barrel amid oversupply worries and heightened geopolitical uncertainty.
📉 Why Prices Are Slipping•
Bearish market sentiment: Investors are increasingly concerned that global supply will outpace demand, especially with heightened output from major producers.
• Signals from the International Energy Agency (IEA): The IEA has warned that oil and gas prices could face downward pressure for the next three to four years due to abundant supply, particularly from the United States and other producers.
Geopolitical tension: Renewed geopolitical risks and U.S.–Europe trade frictions have also unsettled markets, contributing to risk-off sentiment.
📊 Implications for Nigeria’s 2026 BudgetNigeria’s 2026 budget was anchored on a crude oil price of $64.85 per barrel and a production target of about 1.8–1.84 million barrels per day. Oil remains the backbone of Nigeria’s public finances, accounting for the bulk of government revenue and foreign exchange earnings.
With prices below the benchmark, policymakers may now face several fiscal challenges:• Wider budget deficits: Lower oil receipts could deepen deficits and pressure national finances.
Exchange rate & FX pressure: Weak oil export inflows can strain the naira and foreign reserve buffers.
Public spending risks: Capital expenditure and social programs may face cuts if oil revenue falls short.
Production Trends Add to the HeadwindsNew data from industry sources show that Nigeria’s oil output has been declining, with average crude production around 1.54 million barrels per day in December 2025, below both OPEC quotas and budget projections.
Analysts attribute the decline to weak investment, security issues in oil-producing regions, and infrastructure challenges, adding further pressure on oil revenue generation.
🧠 Looking AheadOil markets remain volatile and sensitive to geopolitical developments, supply-demand imbalances, and global economic trends. While prices sometimes spike on conflict-related risks (e.g., tensions in the Middle East), the broader trend points to continued pressure on crude benchmarks below Nigeria’s fiscal assumptions, complicating economic planning for 2026.
Bottom Line: With Brent crude dipping under Nigeria’s 2026 $64.85 budget oil price, Abuja may have to revise fiscal strategies or push reforms to cushion the economy against weaker oil revenue inflows.
Image Credit: Nairametrics
Source: Nairametrics
