Nigeria’s crude oil market opened 2026 on a volatile but high-value trajectory, as soaring global oil prices masked underlying weaknesses in domestic production and export volumes.

Data from the Central Bank of Nigeria (CBN) show that crude oil prices surged dramatically from an average of about $71 per barrel in 2025 to over $93 per barrel in the first four months of 2026. The sharpest jump came in April 2026, when crude prices climbed to $126.71 per barrel — nearly double the level recorded in January 2026.

Meanwhile, the International Energy Agency (IEA) has warned that global commercial oil inventories are declining at a “very fast” pace, amid ongoing tensions in the Middle East that are disrupting Gulf supply, despite coordinated releases of strategic reserves by many governments.

Despite the price rally, Nigeria’s actual oil production and export performance failed to keep pace. Average domestic crude production slipped from roughly 1.46 million barrels per day in 2025 to about 1.41 mbpd in early 2026, while crude exports also declined from an average of 1.01mbpd to 0.96 mbpd within the same period.

The figures suggest that Nigeria benefited more from favourable international pricing than from increased output, underscoring the country’s continued struggle with production constraints, oil theft, pipeline vandalism and operational inefficiencies.

A closer look at the monthly trend highlights the contradiction in the sector. In January 2026, crude oil sold for about $68.05 per barrel, with domestic production at 1.46 mbpd and exports at 1.01 mbpd. By April, prices had skyrocketed to $126.71 per barrel, yet production only improved marginally to 1.49 mbpd, while exports stood at 1.04 mbpd.

The trend points to a fragile oil economy where revenue growth is being driven largely by external market conditions rather than structural improvements in output capacity.

The data also indicate that Nigeria struggled to sustain the stronger production levels recorded in some months of 2025. For instance, July 2025 recorded one of the strongest performances, with production reaching 1.51 mbpd and exports hitting 1.06 mbpd. However, by February 2026, production had dropped to 1.31 mbpd, while exports weakened to 0.86 mbpd despite higher oil prices.

THE warning by IEA comes amid rising concerns over potential fuel shortages ahead of the peak summer travel season in the northern hemisphere, with airlines cautioning that jet fuel supplies could tighten within weeks if the disruptions continue.

Speaking yesterday ahead of a meeting of G7 finance ministers in Paris, IEA Executive Director, Fatih Birol, said global stockpiles were being depleted rapidly.

“The commercial inventories are declining… I think it’s depleting very fast now,” Birol said, noting that while some buffer stocks remain, the situation is tightening. “We have still several weeks, but we should be aware that they’re declining rapidly.”

The developments are linked to escalating tensions in the Middle East, where disruptions to tanker movements through the Strait of Hormuz have affected global oil and gas flows, contributing to higher energy prices.

The IEA said member countries have been drawing down both commercial inventories and strategic reserves at what it described as a “record pace” as diplomatic efforts to de-escalate the conflict continue.

The agency’s warning adds to growing uncertainty in global energy markets, with analysts watching closely for further supply shocks that could impact inflation and transport costs worldwide.