The Nigeria Economic Summit Group (NESG) has urged the Federal Government to maintain crude oil production at 2.2 million barrels per day (bpd), emphasizing that this is crucial for ensuring the viability of the 2025 budget and stabilizing the country’s economy.
Dr. Tayo Aduloju, the Chief Executive Officer of NESG, made this recommendation during the group’s media briefing on its 2025 strategic vision and private sector macroeconomic outlook in Abuja. According to him, achieving this production level is not just a revenue target but a necessary condition for foreign exchange stability and overall economic growth.
Aduloju pointed out that Nigeria’s oil production has fluctuated significantly in recent years, ranging between 1.1 million bpd, 2.2 million bpd, and a peak of 2.8 million bpd. He stressed that despite these variations, the 2.2 million bpd target remains realistic, given the current administration’s commitment to increasing output.
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“Hitting 2.2 million bpd crude production, regardless of the crude oil price, is necessary for the budget to be realistic,” Aduloju said. “The government has shown since it came into office that crude production moved from 1.1 million bpd to 2.2 million bpd, and even to 2.8 million bpd.”
His statement aligns with the NESG’s latest report, “The Arc of the Possible,” which outlines specific short- and medium-term strategies for Nigeria’s economic transformation. The report details how a stable and robust crude oil production strategy can provide the financial foundation necessary for critical policy implementation.
NESG’s Call Comes Amid Oil Price Rally Fueled by Geopolitical Tensions
The NESG’s demand for increased oil production comes at a time when global crude prices are on the rise, driven largely by geopolitical conflicts and shifting U.S. sanctions that have heightened concerns over supply disruptions.
As of 0949 GMT, Brent crude was trading at $74.11 per barrel, extending an eight-day winning streak—the longest since May 2022. Similarly, U.S. West Texas Intermediate (WTI) crude rose slightly to $69.97 per barrel. Both benchmarks have gained approximately 2.5% this week and are up 7% from multi-month lows recorded in early March.
Market analysts attribute this rally to increasing U.S. sanctions on Venezuela and Iran, two major oil-producing nations. The United States has imposed fresh restrictions on Venezuelan crude exports, making it more difficult for the South American country to sell its oil on the global market. Additionally, new sanctions on China’s crude imports from Iran have created uncertainty, further tightening the oil supply.
June Goh, a senior oil analyst at Sparta Commodities, explained that these developments have contributed to an apparent shortage of crude oil in the market.
“The potential loss of Venezuelan crude exports to the market due to secondary tariffs and the possibility of similar restrictions on Iranian barrels has created an apparent tightness in crude supply,” she told Reuters.
The United States has imposed a 25% tariff on potential buyers of Venezuelan crude, adding further restrictions to Venezuela’s ability to trade. At the same time, trade of Venezuelan oil to China, its largest buyer, has stalled, as reported by Reuters. India’s Reliance Industries, which operates the world’s largest refining complex, is now set to halt Venezuelan oil imports, according to sources familiar with the matter.
The combined effect of these sanctions has led to concerns over global supply constraints, pushing oil prices higher. While these rising prices benefit oil-producing nations like Nigeria, they also present challenges, particularly in terms of domestic inflation and fuel pricing.
Nigeria’s Economic Prospects Under Higher Oil Prices
For Nigeria, a sustained oil price rally could provide much-needed revenue, particularly as crude oil earnings remain a key component of the country’s budget framework. In February 2025, President Bola Tinubu signed the N54.99 trillion 2025 appropriation bill into law. This represents a 99.96% increase from the N27.5 trillion budget of 2024 and was passed by the National Assembly on February 13 after undergoing several revisions.
The government has set a $75 per barrel benchmark price for crude oil in the 2025 budget. With Brent crude currently trading at around $74.11 per barrel, the price is nearing Nigeria’s official projection. If the upward trend continues, Nigeria’s revenue targets could be met or even exceeded.
However, Aduloju warned that reaching the 2.2 million bpd production target will require political stability and security in oil-producing regions. He pointed to recent political tensions in Rivers State, a major oil-producing area, as a potential risk factor that could disrupt production.
NESG Report Projects Stronger Economic Growth in 2025
The NESG’s macroeconomic outlook report, “Stabilization in Transition: Rethinking Reform Strategies for 2025 and Beyond,” presents a positive economic forecast if Nigeria implements the right policies. It projects that effective economic reforms could push Nigeria’s GDP growth to 5.5% in 2025, with inflation declining to 24.7% under optimal conditions.
Several factors are expected to drive this growth, including improvements in power supply and fuel availability, which will reduce operational costs for businesses, particularly Nano, Micro, Small, and Medium Enterprises (NMSMEs). Increased foreign exchange liquidity is also expected to provide relief for manufacturers who rely on imported raw materials.
The report further highlights agricultural sector reforms as a critical growth driver, addressing issues related to financing, storage, and logistics. Additionally, it emphasizes the need for enhanced security in farming regions, which would lead to increased food production and ease inflationary pressures.
Aduloju stressed that achieving these targets will require strong coordination between fiscal and monetary authorities, urging the government to align its economic policies to ensure smooth implementation.
Oil Market Uncertainty and Its Implications for Nigeria
While the rise in crude prices presents an opportunity for increased revenue, it also introduces economic risks. Higher oil prices tend to push up fuel costs, and in Nigeria, changes in domestic pump prices have historically been linked to fluctuations in global crude markets.
U.S. crude inventory data released by the Energy Information Administration (EIA) showed that U.S. crude stockpiles fell by 3.3 million barrels last week, far exceeding analysts’ expectations of a 956,000-barrel decline. This reduction in U.S. supply has provided further support for global crude prices.
However, the long-term sustainability of current price levels remains uncertain, given ongoing geopolitical tensions, trade conflicts, and global economic instability. Analysts at BMI maintain their 2025 forecast for Brent crude at $76 per barrel, down from an average of $80 per barrel in 2024, citing uncertainties in the oil market.