Oil Revenue: Low Production Undermines Benefits Of High Crude Oil Prices

Nigeria lost an estimated $839.22 million in oil revenue in the first four months of 2026 after failing to meet its 1.5 million barrels per day (mbpd) crude oil production quota set by the Organisation of Petroleum Exporting Countries (OPEC), findings by  Financial Vanguard  have shown.

Data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that combined oil production rose from 1.66 million bpd in April to 1.70 million bpd in May.

The commission reported that crude oil production averaged 1.53 million bpd during the month, surpassing Nigeria’s OPEC quota of 1.5 million bpd by two per cent and marking the first time the country has met and exceeded its allocation in 2026.

The May 2026 production figures represent the highest combined crude oil and condensate output since July 2025, when production reached 1.71 million bpd. In crude oil alone, the 1.53 million bpd recorded last month is the highest level since January 2025, a 15-month high.

Data obtained from NUPRC and the Central Bank of Nigeria (CBN) showed that the country have been recording significant shortfalls in both OPEC quota and 2026 budgeted output benchmark month-on-month to April this year, limiting its ability to take advantage of higher crude oil prices driven by the Middle East crises so far this year.

Details of oil output reports by both OPEC and CBN showed that in January, Nigeria produced 45.236 million barrels of crude oil, representing an average daily output of 1.459 mbpd. This translated into a production shortfall of 1.264 million barrels for the month.

With Bonny Light crude trading at an average of $68.05 per barrel, according to CBN data, the country recorded an estimated revenue loss of $86.02 million.

In February, crude oil production dropped to 36.783 million barrels, averaging 1.313 mbpd. This resulted in a monthly shortfall of 5.217 million barrels and an estimated revenue loss of $377.35 million, based on an average crude price of $72.33 per barrel.

For March, Nigeria recorded a production shortfall of 3.132 million barrels after producing 42.868 million barrels, equivalent to an average daily output of 1.386 mbpd. The shortfall translated into an estimated revenue loss of $332.27 million during the month.

Production improved in April, with output rising to 44.657 million barrels, or 1.488 mbpd. But the improvement still fell short of benchmarks, missing OPEC target by 0.344 million barrels, resulting in an estimated revenue loss of $43.59 million.

CBN data also indicated that oil exports remained weak during the period, averaging less than one million barrels per day for most of the first four months of the year.

Oil exports stood at 1.01 mbpd in January but declined by 14.8 percent to 0.86 mbpd in February. Exports improved marginally to 0.93 mbpd in March before rising to 1.04 mbpd in April.

Findings by  Financial Vanguard  further showed that the persistent production shortfalls could undermine the implementation of the 2026 budget, which is benchmarked on crude oil production of 1.8 mbpd.

Available data indicate that average crude oil and condensate production stood at 1.58 mbpd in the first four months of the year, significantly below the budget benchmark.

NUPRC figures showed that total average daily production was 1.627 million barrels in January, 1.483 million barrels in February, 1.546 million barrels in March, and 1.663 million barrels in April.

The cumulative revenue loss from the monthly figures is approximately put at $839.23 million by the data.

Speaking on the development, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, hinted that the Federal Government’s drive towards massive investments in the sector may have failed to materialize.

He also attributed the production shortfalls to traditional challenges of persistent crude oil theft and pipeline vandalism.

According to him, while security interventions have helped improve production levels compared to previous years, Nigeria still faces significant challenges in attracting the scale of investment required to sustain higher output levels.

Industry analysts have similarly linked the country’s inability to consistently meet its OPEC quota to underinvestment in upstream infrastructure, and operational challenges in key producing fields.

Despite recent improvements in output, concerns remain over Nigeria’s capacity to sustain production levels at or above its OPEC quota in the months ahead and achieve the ambitious production target underlining the 2026 budget.

A petroleum sector governance expert, Henry Adigun, attributed Nigeria’s inability to meet its OPEC production quota and the 2026 budget benchmark to persistent crude oil theft, pipeline vandalism, inadequate investment and structural challenges in the upstream sector.

Speaking with  Financial Vanguard, Adigun noted that while government reforms under the Petroleum Industry Act (PIA) have improved the fiscal environment for investors, production growth cannot occur overnight due to the long lead time required for investment decisions and field development.

According to him, Nigeria’s production challenges extend beyond pricing and market conditions, as operators must contend with security concerns and infrastructure constraints that continue to discourage investment.

“To sell more, you have to produce more. The capacity to produce more depends on several factors. One is the fiscal regime, which is much better now than it used to be. The second is investment in the sector, while the third is the high level of crude oil theft taking place in Nigeria,” he said.