The price of crude oil has dropped to $59 per barrel, the first decrease since February 2021.
According to reports on Wednesday, Brent crude, global oil price, fell by 5.09 percent to $59.62 per barrel at 12.30 WAT, while the US West Texas Intermediate fell by 5.54 percent to $56.28 per barrel.
The fall in price comes after President Donald Trump’s announcement on April 2 imposing sweeping global tariffs on all imports into the US. 14% was imposed on Nigeria.
Following the above, on April 4, the Organisation of Petroleum Exporting Countries (OPEC) and its allies increased oil production by 411,000 barrels per day (bpd) in May.
The latest drop in price threatens Nigeria’s oil revenue, as it is lower than the country’s 2025 budget benchmark of $75 per barrel.
Addressing the issue, Chief Operating Officer (COO) of Aiona and country manager of Tradegrid, Jide Pratt, said it means lower revenues and lower foreign reserves for Nigeria, especially with the suspension of the naira-for-crude deal.
“We’ve seen an increase in foreign exchange (FX) rates, which does not help monetary or fiscal policy.
“Personally, I believe it does show that the benchmark for our budget leaves a lot to be desired. More importantly, we are on the road to a supplementary budget and loans.
“We need to sell off some assets to the private sector and enable growth in our economy to buffer low crude oil prices.”
Additionally, Pratt added that since Nigeria depends largely on oil revenue, “there can be no better time to really diversify”.
