Plan for your Naira: “The International Energy Agency (IEA) has warned that global oil supply may exceed demand by approximately 600,000 barrels per day (bpd) in 2025, posing a serious risk of oversupply in the market…Nigeria’s 2025 budget is built on the assumption of oil production at 2.06 million barrels per day (bpd), an oil price of $75 per barrel, and a revenue target of N36.35 trillion, with 56% expected to come from oil sales”
While diversification efforts in agriculture and manufacturing have been touted as long-term solutions, the short-term reality is that Nigeria’s fiscal stability remains heavily tied to oil prices. Any significant downturn in oil revenue could trigger new austerity measures, adding more strain to an already struggling economy.
With the IEA’s outlook painting a bearish picture for oil markets, analysts are urging Nigeria’s policymakers to closely monitor OPEC+ decisions in the coming months. If crude prices fall far below $75 per barrel, the government may be forced to revise its revenue projections downward and seek alternative funding sources.
Let me ask you, do you have a strategy on how this could impact the Naira? If the global economy enters a recession and they do not need a lot of oil, it will affect everyone in Nigeria. And if Russia is normalized with sanctions removed, enabling it to enter the mainstream oil market, the equilibrium will shift. So, have a plan because 2025 will be interesting!
IEA Warns of Oil Surplus in 2025 as Weaker Demand Puts Pressure on Producers, Nigeria Stands At Risk
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