Nigeria’s crude oil sector generated an estimated N55.5tn in gross revenue in 2025, reflecting higher earnings year-on-year even as production levels remained below both budgetary expectations and the country’s OPEC quota for most of the period. The figure underscores the continued centrality of oil to the Nigerian economy, driven largely by price performance rather than output growth.
An analysis of official crude oil production figures from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), combined with crude price data published by the Central Bank of Nigeria (CBN), shows that the 2025 earnings exceeded the N50.88tn recorded in 2024. In total, Nigeria produced 530.41 million barrels of crude oil between January and December 2025, with output fluctuating through the year amid operational disruptions, outages, and a slow recovery in some fields.
The estimated N55.5tn revenue was derived by applying an average crude oil price of $72.08 per barrel to total production of 530.41 million barrels, resulting in gross earnings of about $38.23bn. Converted at an exchange rate of N1,450 to the dollar, this translates to approximately N55.5tn for the year.
Production data reveal a volatile output pattern. Crude oil production began the year strongly at 47.70 million barrels in January, before declining sharply to 41.02 million barrels in February. Output recovered modestly to 43.42 million barrels in March and rose further in April to 44.57 million barrels. Production remained relatively stable in the second quarter, inching up to 45.04 million barrels in May and 45.16 million barrels in June.
In the third quarter, output climbed to 46.73 million barrels in July but fell again in August to 44.47 million barrels and dropped further to 41.69 million barrels in September, one of the lowest monthly levels recorded in 2025. Production rebounded slightly in the final quarter, reaching 43.44 million barrels in October, 43.08 million barrels in November, and 44.08 million barrels in December, according to the NUPRC.
While production lagged, crude oil prices provided support for revenue. CBN data show that Bonny Light, Nigeria’s flagship crude grade, traded at relatively high levels early in the year before easing in the second quarter. Prices averaged $80.76 per barrel in January, fell to $77.08 in February and $74.44 in March, and declined further to $69.07 in April. Bonny Light hit a low of $65.90 per barrel in May, reflecting softer global market conditions.
Prices recovered in June to $73.50 and remained broadly stable through the third quarter, averaging $73.18 in July, $70.55 in August, and $70.20 in September. In October, the latest month for which CBN data were available, prices fell again to $66.15 per barrel. Using the simple average of the 10 monthly prices published by the CBN, crude oil prices averaged $72.08 per barrel over the review period.
Industry analysts cautioned that the N55.5tn figure represents gross revenue rather than actual government receipts. It does not account for production costs, joint venture cash calls, production-sharing contract cost recovery, oil theft, domestic crude supply obligations, or deferred liftings. Nevertheless, the analysis highlights the scale of crude oil inflows generated in 2025 and reinforces the importance of price movements in cushioning revenue shortfalls caused by weak output.
The amount is understood to represent expected earnings by the Nigerian National Petroleum Company Limited (NNPC), international oil companies, and their indigenous counterparts from crude oil sales during the year. By comparison, Nigeria produced 408.68 million barrels of crude oil in 2024, generating approximately N50.88tn.
Crude-for-loan obligations
Part of Nigeria’s crude oil output has also been tied to debt servicing arrangements. In 2024, NNPC serviced a portion of its $3bn forward-sale loan from the African Export-Import Bank (Afreximbank) with crude oil valued at N991bn, according to its 2024 financial statement. The repayment was linked to Project Gazelle, a forward crude oil supply agreement signed in 2023.
In August 2023, NNPC announced it had secured a $3.3bn emergency loan from Afreximbank to support the Federal Government’s efforts to stabilise the naira and meet crude oil supply obligations. Under the arrangement, NNPC committed to delivering 90,000 barrels of crude oil per day from production sharing contract assets. By December 31, 2023, $2.25bn had been drawn, with principal repayments scheduled to begin in June 2024.
The facility carried an interest rate of three-month LIBOR plus 6.5 per cent, including a 6 per cent margin and a 0.5 per cent liquidity premium. As of the end of 2024, total drawdowns had reached N4.9tn out of the available N5.1tn, with N991bn worth of crude already lifted in repayment, leaving an outstanding balance of N3.8tn. It remains unclear how much crude oil was committed to servicing this balance over the course of 2025.
OPEC quota and missed targets
Despite government efforts to boost output, Nigeria’s crude oil production dipped in December 2025, falling by 14,000 barrels per day. NUPRC data show that output declined from 1.436 million barrels per day (mbpd) in November to 1.422 mbpd in December, representing about 95 per cent of Nigeria’s 1.5 mbpd quota set by the Organisation of the Petroleum Exporting Countries (OPEC).
Overall, Nigeria fell below its OPEC quota in nine months of 2025, meeting or slightly exceeding the target only in January, June, and July. Average daily production opened the year strongly at 1.54 mbpd in January, about 38,700 bpd above the quota, but slipped to 1.47 mbpd in February and weakened further to 1.40 mbpd in March.
Although production recovered modestly in April (1.49 mbpd) and May (1.45 mbpd), output remained below the OPEC ceiling until June, when it edged up to 1.51 mbpd. The momentum continued in July at the same level before production declined again in the third quarter, averaging 1.43 mbpd in August and dropping to a yearly low of 1.39 mbpd in September. Output remained subdued in the final quarter, averaging 1.40 mbpd in October, 1.436 mbpd in November, and 1.422 mbpd in December.
Nigeria also missed its own budgetary oil production target. The 2025 budget was anchored on daily production of 2.1 million barrels of oil, including crude and condensate, equivalent to 766.5 million barrels for the year. In reality, total production stood at 599.64 million barrels—comprising 530.41 million barrels of crude and 69.23 million barrels of condensate—leaving a shortfall of 166.86 million barrels.
As a result, the 2026 oil benchmarks were deliberately set more conservatively. The new assumptions include daily production of 1.84 million barrels, a benchmark crude oil price of $64.85 per barrel, and an average exchange rate of N1,400 to the dollar, reflecting uncertainties in the global oil market and persistent domestic challenges such as security and infrastructure constraints.
Experts weigh in
Economists and energy experts say Nigeria’s crude oil production challenges are rooted in structural and governance issues. Professor of Economics, Segun Ajibola, noted that production volumes depend on multiple factors, many of which lie beyond the immediate control of government.
According to him, while the government can invest in exploration, outcomes are shaped by technical cooperation with joint venture partners, global oil market dynamics, environmental conditions, and long-standing domestic problems. Ajibola pointed to unresolved host community disputes, pipeline vandalism, oil theft—estimated to account for as much as 30 per cent of potential output—widespread insecurity, and corruption as major constraints.
“The government can be more decisive in addressing those problems that are right on its table to jack up production levels and meet planned targets. It does not appear that the government is doing enough at the moment,” he said.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, identified insecurity and policy uncertainty as the two biggest challenges facing oil production. He acknowledged government efforts to protect pipelines and investors, including the use of community-based security arrangements, but said results remain below expectations.
On policy, Yusuf said delays in passing the Petroleum Industry Act and the need for further fine-tuning of its fiscal terms have dampened investor confidence. He stressed that Nigeria is competing with other oil-producing countries offering more attractive incentives.
He cited recent engagements between the President and global oil majors, including a reported $20bn investment commitment from Shell, as encouraging signs. “Improving fiscal terms, ensuring policy stability, and guaranteeing the security of investments are critical if Nigeria is to attract the capital needed to boost production,” Yusuf said.
Professor of Energy, Dayo Ayoade, argued that governance remains central to achieving production targets. He said adherence to laws, transparent sector management, and clear implementation programmes are essential to restoring investor confidence.
Despite the N55.5tn earned in 2025, Ayoade noted that high production costs, lingering oil theft, and the overall cost of doing business in Nigeria continue to undermine competitiveness. “The cost of production in Nigeria is one of the highest in the world. If the government wants to achieve its 2026 oil targets, it must address the cost of doing business in the oil industry,” he said.
While acknowledging these challenges, Ayoade commended recent investment decisions, including Shell’s continued investment in the Bonga field and efforts to support indigenous producers in developing marginal fields. He added that licence holders must be held accountable for inactive assets, noting that productive use of licences could help lift output over time.
“There are good things happening. It’s not all bad news. But the government can do more to ensure that Nigeria meets its oil production targets,” he said.