Nigeria’s oil production declined in January 2026, missing both its budget benchmark and the quota set by the Organization of the Petroleum Exporting Countries, as fresh data revealed mounting revenue losses estimated at N1.76tn over a 13-month period.
Figures released by the Nigerian Upstream Petroleum Regulatory Commission showed that total oil output, including condensate, dropped by 6.3 per cent year-on-year to 1.627 million barrels per day in January 2026, compared with 1.737 million bpd in January 2025.
Month-on-month, production also weakened, slipping from 1.544 million bpd in December 2025 to 1.627 million bpd in January 2026. The Commission’s National Liquid Hydrocarbon Production Report indicated that combined crude oil and condensate output ranged between a low of 1.59 million bpd and a peak of 1.82 million bpd during the month.
Nigeria’s 2026 budget is built on a production benchmark of 1.84 million bpd, with a reference oil price of $64.85 per barrel and an exchange rate of N1,400 to the dollar. January’s performance fell short of that output projection.
Separately, OPEC data showed that Nigeria’s crude oil production, excluding condensate, stood at 1.459 million bpd in January 2026, down five per cent from 1.539 million bpd recorded in January 2025. The figure also remained below the country’s OPEC quota of 1.5 million bpd.
The shortfall in production has had significant fiscal implications. Between January 2025 and January 2026, Nigeria recorded cumulative output deficits of about 18.12 million barrels relative to its OPEC allocation.
Using the average Bonny Light crude price of $72.08 per barrel, based on data from the Central Bank of Nigeria, the production gap translates to an estimated $1.31bn in lost revenue. At an exchange rate of N1,353 per dollar, this amounts to roughly N1.76tn.
The most pronounced deficit occurred in September 2025, when output dropped to 1.39 million bpd, creating a daily shortfall of about 110,000 barrels. January 2026 marked the sixth consecutive month Nigeria failed to meet its OPEC target.
This underperformance occurred despite total oil production of about 530.41 million barrels in 2025, which generated gross revenue estimated at N55.5tn at the same average price and exchange rate. Analysts, however, noted that this figure reflects gross earnings and excludes production costs, joint venture obligations and losses linked to oil theft.
Energy analyst, Professor Emeritus Wumi Iledare, said the core issue confronting the sector is production capacity rather than price volatility. He noted that while the government projected output of 766.5 million barrels in 2025, actual production stood at roughly 599.6 million barrels, leaving nearly 167 million barrels unrealised.
He stressed that achieving future targets would depend on strengthening security around oil infrastructure, accelerating regulatory processes and encouraging reinvestment in existing fields.
Economist Segun Ajibola added that crude oil output is influenced by multiple variables, including technical partnerships, operational stability and developments in the global oil market. He also pointed to structural challenges within the Nigerian National Petroleum Company Limited as part of the broader production constraints.
Meanwhile, global oil prices eased to about $67 per barrel, down from nearly $70 in previous weeks, though still above the Federal Government’s benchmark price.
The production slump has intensified fiscal pressures. Federal Government revenue between January and July 2025 stood at N13.67tn, significantly below the pro rata target of N23.85tn. Oil revenue underperformance weighed heavily on aggregate collections.
Capital releases to Ministries, Departments and Agencies have also been severely constrained. Only N834.80bn was released out of a pro rata capital allocation of N10.81tn within the first seven months of 2025, reflecting less than 10 per cent performance. Total capital expenditure stood at N3.60tn, representing a 73.7 per cent shortfall.
Key ministries, including health, transport, marine and blue economy, and women affairs, reported minimal capital releases despite substantial budgetary allocations.
While the Minister of Budget and Economic Planning, Abubakar Bagudu, has argued that revenue pressures are not unusual in democratic systems, the combined effect of declining oil output and persistent OPEC shortfalls continues to strain public finances and complicate implementation of the 2026 budget.
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