Global crude oil prices are climbing, driven by a tight supply outlook reaffirmed by the OPEC+ alliance and intensifying geopolitical risks that threaten stability in key production and transit regions. The upward momentum has significant implications for economies dependent on oil exports and imports, like Nigeria.
As of Tuesday, December 2, 2025, Brent Crude Futures are trading around $63.31 per barrel, and WTI Crude Futures are near $59.50 per barrel. The primary structural factor supporting oil prices is the collective policy of the world’s largest oil producers:
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) reaffirmed their plan to pause output increases through the first quarter of 2026 (January to March). This decision follows a period of increasing supply since April 2025 and is designed to stabilize the market amidst concerns about a potential global oversupply next year.
The group also endorsed a new mechanism for 2027 to set quotas based on Maximum Sustainable Capacity (MSC), a move aimed at rewarding member states, like Nigeria, that demonstrate sustained investment in their upstream sector to boost technical production capacity.
Additionally, rising geopolitical instability has imposed a tangible risk premium on prices, threatening immediate supply flows:
Continued Ukrainian drone strikes on Russian energy infrastructure recently caused a temporary suspension of loadings at the Caspian Pipeline Consortium’s (CPC) Black Sea terminal. This disruption to a key conduit for Kazakh and Russian crude highlights the vulnerability of major export routes.
Mounting friction between the United States and Venezuela, including signals that the US may tighten existing restrictions, is raising concerns that exports from Venezuela (currently around 800,000 bpd) could be further impacted, adding to the supply squeeze.
For Nigeria, which relies on crude oil for over 90% of its foreign exchange earnings and over 75% of government revenue, rising oil prices present a complex duality:
Higher prices provide a critical boost to the nation’s foreign reserves and government revenue, which are vital for stabilizing the volatile Naira exchange rate and funding the national budget.
However, since Nigeria imports nearly all of its refined petroleum products (despite its large crude output), the high global crude price translates directly into higher landed costs for gasoline and diesel. Although the subsidy has been removed, high prices fuel domestic inflation by increasing transportation and production costs across the economy.
The renewed focus on geopolitical instability underscores Nigeria’s deep vulnerability as a mono-product economy, whose fiscal health remains entirely dependent on external factors beyond its control.
The current price environment presents an opportunity for Nigeria to bolster its reserves, but the government must ensure the windfall is effectively managed to mitigate inflationary fallout and accelerate the economic diversification drive (especially in non-oil sectors like ICT and Financial Services).
