Nigeria has, for the fifth time, failed to meet oil production targets, creating a shortfall of about 1.36 million barrels in unrealised output and a $3.9 billion deficit for the 2026 budget at a time of oil windfall.

Although production increased last month to 1.7 million barrels per day (mbpd) from 1.520mbpd in April, registering the highest output for 2026, it falls short of 1.84mbpd benchmarked for 2026.

Nigeria has persistently struggled to meet oil production benchmarks. While the 2026 budget benchmark stands at 1.84mbpd, the oil sector has repeatedly projected output of two million bpd this year, both targets have remained a mirage for most of the first half of the year despite the inclusion of condensates.

According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), in January, Nigeria’s production stood at 1,627,461 bpd, indicating a shortfall of 212,539 bpd. With oil prices averaging $66.60 per barrel, the country recorded losses of about $14.2 million daily or $438.8 million for the month.

In February, production dropped to 1,483,954 bpd, leaving a deficit of 356,046 bpd. At an average price of $73 per barrel, this translated to losses of $25.9 million daily or $727.7 million for the month.

In March, output rose slightly to 1,546,093 bpd, with a shortfall of 293,907 bpd. With oil prices averaging $122 per barrel, losses were estimated at $35.8 million daily or $1.1 billion for the month.

The trend persisted in April, when production stood at 1,663,413 bpd, with a shortfall of 176,587 bpd. At an average price of $114 per barrel, losses were estimated at $20.1 million daily or $603.9 million for the month.

NUPRC’s monthly report released yesterday showed that production stood at 140,000 bpd in May. At a time the country is borrowing and spending heavily to secure oil infrastructure, it recorded a production shortfall of 140,000 bpd in May. With oil prices averaging $112 per barrel, losses were estimated at $15.6 million daily or $486 billion for the month.

For the first five months of the year, Nigeria’s cumulative production shortfall stood at about 1.36 million barrels, translating into a $3.6billion loss and raising concerns over the ability of the 2026 budget to meet projected oil revenue despite favourable prices.

Among production streams, Bonny Terminal led the pack with a total blend of 293,870 bpd, closely followed by Forcados Terminal at 289,900 bpd. Qua Iboe ranked third with 173,360 bpd, while Escravos Oil Terminal contributed 135,470 bpd. Odudu (Amenam Blend) completed the top five production streams, accounting for 63,250 bpd during the month under review.

The NUPRC attributes the rise in production to a sustained positive momentum as operations remained stable throughout the reporting period with no significant pipeline or facility outages recorded.

Additionally, all previously scheduled turnaround maintenance activities had been successfully completed, contributing to improved operational reliability and production efficiency.

Meanwhile, the Organisation of Petroleum Exporting Countries (OPEC), while retaining its major market outlook, said Nigeria’s economic outlook has continued to improve, supported by stronger macroeconomic stability, robust oil production, recovering private consumption, and firmer business activity.

According to the latest assessment, the economy grew by 3.9 per cent year-on-year in the first quarter of 2026, nearly matching the four per cent expansion recorded in the last quarter of 2025.

The report noted that growth in the non-oil sector was largely driven by agriculture, manufacturing, construction, information and communication, trade, as well as finance and insurance, which collectively accounted for the bulk of the expansion.

Business conditions have also strengthened, with the Purchasing Managers’ Index (PMI) rising to 54.1 in May, from 52.4 in April, 51.9 in March and 53.2 in February, marking the strongest improvement in private-sector activity since August 2025.

OPEC attributed the positive outlook to ongoing structural reforms, increased infrastructure investment, improved trade conditions and stronger external buffers.

Higher oil prices and growing domestic refining capacity were also cited as key factors supporting the economy, contributing to a stronger external position.

The organisation expressed optimism that the trend would continue in the near term, supported by relatively contained inflation, exchange-rate stability and sustained reform momentum.

However, concerns persist about oil production challenges, which could weigh on revenue performance if left unaddressed.