Crude oil is a major source of revenue for the Nigerian government and contributes a significant portion to foreign exchange earnings as of 2024, crude oil export accounted for 71.39% of total exports. From a geopolitical standpoint, oil continues to provide Nigeria with global recognition, particularly through its membership in the Organization of Petroleum Exporting Countries (OPEC). According to the OPECs latest report, Nigeria ranked as the largest oil producer in Africa as of September 2025. The country s status as a top producer grants it influence in shaping OPEC s policy decisions.

Nigeria s oil outlook for the rest of 2025 remains moderately positive but still below official projections. Oil prices have traded between USD60.88 66.25pb in Q4:2025, while production continues to hover around OPEC s 1.50MMbpd quota after a September dip caused by a three-day PENGASSAN strike. The strike and concurrent maintenance work temporarily shut down key assets, which include the Bonga FPSO, Oben Gas Plant, and export terminals at Akpo, Brass, and Egina thereby leading to a brief but notable loss in output.

Though production has gradually recovered with improved pipeline security and higher rig activity, under-investment, aging fields, and operational disruptions remain constraints. On the upside, non-oil taxes are rising, and FX reforms are supporting naira inflows, while the reopening of affected facilities between October and December should push output closer to OPEC’s quota by year-end. The commencement of the 2025 Licensing Round, effective December 1, 2025, should bode well for the oil sector, with the Federal Government aiming to lift production by an additional 1.00MMbpd in the medium term.

Overall, Nigeria is likely to record underwhelming oil and gas revenues in 2025, with performance falling short of budget assumptions and reflecting a year of gradual recovery rather than full resurgence. In our view, crude oil production could average between 1.45MMbpd and 1.50MMbpd by December 2025.

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