Nigeria’s Crude Oil Production Hits Record Low in 2025, Threatening Fiscal Stability

Sharp Decline in Oil Output Raises Economic Concerns

Nigeria’s fiscal stability faces significant pressure as crude oil production plummeted to its lowest level in 2025, raising serious concerns about the country’s ability to fund its national budget and maintain foreign exchange earnings.

Production Figures Show Alarming Drop

Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reveals a concerning decline of 68,177 barrels per day (bpd) in March. Africa’s largest crude oil producer saw its total production fall to 1.60 million bpd from 1.67 million bpd during the period.

The breakdown shows Nigeria recorded:

• 1.4 million bpd in crude production
• 55,827 barrels of blended condensates
• 147,166 barrels of unblended condensates

Historical Context of the Decline

This marks the lowest production level so far in 2025, following January’s output of 1.74 million bpd and February’s 1.67 million bpd. The NUPRC report stated: “Lowest and Peak Combined crude oil and Condensate Production in March were 1.49 million bopd and 1.76 million bopd, respectively.”

Economic Implications for Nigeria

The production drop comes at a critical time when oil revenues remain vital to Nigeria’s economy, contributing substantially to the national budget. With production falling below OPEC quotas, the government faces mounting challenges in:

• Meeting revenue targets
• Funding development projects
• Maintaining dollar earnings

Nigeria’s 2025 budget was based on ambitious assumptions of $75 per barrel oil price and 2.06 million barrels per day production target.

Expert Warnings and Analysis

Jide Pratt, COO of Aiona and TradeGrid country manager, warned this situation could lead to:

• Increased government borrowing
• Growing national debt
• Potential foreign exchange rate increases

“There’s a need to give more attention to sectors like agriculture, trade, and fintech,” Pratt emphasized, highlighting the urgency for economic diversification.

Broader Economic Risks

With oil exports accounting for 90% of Nigeria’s foreign exchange earnings, the production decline poses severe risks to:

• Dollar reserves
• Naira stability
• Debt servicing capacity

Emerging markets analyst Ike Ibeabuchi identified multiple threats: “One is the declining oil output. Two is the falling oil price. Three is Donald Trump’s tariff, and four is the debt.”

For more details, read the original article on BusinessDay.