Nigeria may have lost about $28 million per barrel yesterday after oil prices plummeted further as demand concerns intensified following US President Donald Trump’s new tariffs on China and increased global supply.
Analysts say about 70 countries a average reached out to the Trump’s administration to negotiate.
Brent crude price dropped by around 0.14 per cent, trading at $61.27 per barrel, down from $61.36 at the previous session’s close. US benchmark West Texas Intermediate fell about 0.12 per cent , settling at $57.83 per barrel, compared to its prior session close of $57.90.
But Nigeria’s budget is anchored on a benchmark oil price of $75 per barrel and an ambitious production target of 2.06 million barrels per day.
The implication is that, at the budget bench mark price, Nigeria would make $154,500,000 a day.
But with Brent price down to about $61 per barrel, it then means that the country would only realise $28,810,000 daily.
Thus, the country would have lost $28.81 million a day.
Analysts say approximately N193.63 trillion, up to 56 per cent of the initially projected N34.8 trillion revenue, is expected to stem from oil, reflecting Nigeria’s heavy reliance on oil for fiscal sustainability.
“WTI crude futures have fallen for seven consecutive trading days, dropping more than 20% from the April peak and hitting a four-year low.
“I think recession fears are playing a key role in the oil selloff, especially with the U.S. pushing ahead with a 104 per cent tariff on Chinese goods and Beijing showing no signs of compromise. That raises serious concerns about global demand,” Dilin Wu, research strategist at Pepperstone, said.
Prices fell as US President Donald Trump’s sweeping global tariffs officially took effect early yesterday, including a staggering 104 per cent tariff on Chinese imports, escalating trade tensions with major partners across Asia and Europe.