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🇳🇬 Nigeria /Economy & Trade

Despite Output Rise, Nigeria Underproduces Crude Oil by 35.3m Barrels in 5 Months

From ThisDay · () English

Summarized and contextualized by DistantNews.

At a glance

News Sources not specified Context piece
  • Nigeria produced 35.3 million fewer barrels of crude oil and condensate than budgeted between January and May, despite recent output recovery.
  • Average daily production of 1.61 million barrels per day fell short of the 1.84 million bpd target set in the 2026 budget.
  • This underperformance highlights challenges in boosting oil revenues, foreign exchange earnings, and public finances for Africa's largest oil producer.

Nigeria's oil sector is struggling to meet production targets, producing approximately 35.3 million fewer barrels of crude oil and condensate than projected in its 2026 budget during the first five months of the year. Despite a steady recovery in output, the average daily production of 1.61 million barrels per day fell short of the federal government’s benchmark of 1.84 million bpd.

the country’s production performance improved progressively after dropping to a low of 1.48 million bpd in February.

— THISDAY analysisContextualizing the month-to-month production figures.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) data shows a progressive improvement in output after a low in February, reaching 1.70 million bpd in May. However, this upward trend was insufficient to bridge the gap between projected and actual output, which underpins the N68.32 trillion 2026 federal budget.

Over the January-May period, Nigeria produced about 242.6 million barrels against an expected 277.8 million barrels, representing a shortfall of 12.7 percent. This underperformance underscores the continuing challenge for Africa's largest oil producer in increasing output to support government revenues, improve foreign exchange earnings, and reduce pressure on public finances.

the upward trend was insufficient to bridge the gap between projected and actual output target underpinning the N68.32 trillion 2026 federal budget by the Bola Tinubu administration.

— THISDAY analysisExplaining the impact of production trends on the national budget.

At the budget's oil price of $64.85 per barrel and an exchange rate of N1,400 to the US dollar, the 35.3 million barrels not produced represent a gross value of approximately $2.29 billion, or about N3.2 trillion. While actual fiscal losses are complex to determine, the figures illustrate the significant volume deficit relative to the budget assumptions.

The figures underscore the continuing challenge facing Africa’s largest oil producer as it seeks to increase output sufficiently to support government revenues, improve foreign exchange earnings and reduce pressure on public finances.

— THISDAY analysisHighlighting the broader economic implications of the production shortfall.
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Originally published by ThisDay. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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