Global oil prices continued their downward trend on Thursday, settling below the $70 per barrel mark ahead of a crucial meeting of the Organisation of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+. Brent crude fell by 1.11 percent to $66.85 per barrel, while U.S. West Texas Intermediate (WTI) dropped 1.20 percent to $63.20. The decline comes just days before eight key producers — including Saudi Arabia, Russia, Iraq, and the UAE — meet to decide on voluntary production adjustments that could further influence market stability.
The upcoming Sunday meeting is expected to focus on whether the cartel should increase oil output in October as part of efforts to regain lost market share. OPEC+ has in recent months been gradually phasing out its 2.2 million barrels per day (bpd) output cuts, initially agreed to in December 2024 and scheduled to taper until September 2026. The group had already approved phased production increases earlier this year, raising supply by over 500,000 bpd in both August and September.
For Nigeria, Africa’s largest oil producer, the slump in oil prices presents fresh fiscal challenges. The 2025 national budget is benchmarked at $75 per barrel with a daily production target of 2.2 million bpd. With current oil trading well below that mark and production hovering between 1.6 million and 1.8 million bpd, analysts warn that budget implementation could be in jeopardy, describing the fiscal framework as “dead on arrival.” The volatility also raises concerns about Nigeria’s ability to finance key projects and maintain economic stability.
In response, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has been intensifying efforts to raise output, even threatening to revoke dormant oil wells. Earlier this week, the regulator concluded a landmark Production Sharing Contract (PSC) for Oil Prospecting Licences (OPL) 2001 and 2002, covering 2,000 square kilometres in the Deepwater West Delta basin. The licences were awarded to TotalEnergies, which holds an 80 percent stake, and South Atlantic Petroleum with 20 percent. NUPRC Chief Executive, Gbenga Komolafe, described the deal as a “policy shift” aimed at unlocking Nigeria’s vast gas reserves and accelerating the transition to a gas-powered economy.
Officials say the new contract model, which prioritises dedicated gas development, could serve as a template for future offshore and frontier acreage agreements. However, experts caution that while such policy reforms may improve long-term energy security, they do little to address the immediate risks posed by fluctuating oil prices and underwhelming production volumes. As OPEC+ prepares to decide on output increases, Nigeria’s fragile fiscal outlook remains at the mercy of global oil market dynamics.
