Falling production widens gap with government projections despite strong global crude prices……
Nigeria’s oil sector is facing renewed pressure after the country recorded a production shortfall of approximately 16.6 million barrels of crude oil and condensate within the first two months of 2026.
An analysis of data released by the Nigerian Upstream Petroleum Regulatory Commission shows that between January and February, total output stood at about 92 million barrels, well below the 108.6 million barrels projected under the Federal Government’s benchmark of 1.84 million barrels per day.
The figures highlight a persistent gap between expectations and actual performance, raising concerns about Nigeria’s ability to fully benefit from favourable global oil prices.
Production Slips Further in February
A closer look at the data reveals a worsening trend. In January, Nigeria’s total liquids production averaged roughly 1.63 million barrels per day, already about 210,000 barrels below the government’s target.
By February, output dropped further to around 1.48 million barrels per day, widening the deficit to approximately 360,000 barrels daily.
The decline was driven primarily by reduced crude oil production, which remains the backbone of Nigeria’s output. Average crude production fell from 1.46 million barrels per day in January to about 1.31 million barrels per day in February.
Although condensate production exempt from Organization of the Petroleum Exporting Countries quotas offered some support, it was not enough to offset the broader decline in crude volumes.
Export Terminals Record Declines
The downturn was also reflected across key export terminals. Facilities such as Qua Iboe, Bonny, Forcados, Escravos, and Brass all reported lower output levels between January and February, contributing to the overall drop in national production.
This widespread decline underscores ongoing structural and operational challenges within Nigeria’s oil sector.
Missed Opportunity Amid High Prices
The production shortfall comes at a time when global crude prices remain elevated, hovering between $110 and $120 per barrel due to geopolitical tensions.
However, Nigeria’s inability to ramp up production means it is missing out on significant revenue opportunities that could have boosted foreign exchange earnings and strengthened external reserves.
Recent data also points to volatility in output levels. While production in January reached about 1.459 million barrels per day, maintaining Nigeria’s position as Africa’s top producer it still fell short of its quota.
By February, output declined sharply by over 10 percent, reflecting the sector’s ongoing instability.
Hope for Modest Recovery
Despite the downturn, there are expectations of a gradual rebound. The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Bashir Bayo Ojulari, has indicated that production could increase by about 100,000 barrels per day in the coming months.
Why It Matters
Nigeria’s economy remains heavily reliant on oil revenues, making production levels a critical factor in fiscal stability.
Higher output especially at a time of strong global prices typically translates into increased government revenue, improved foreign exchange inflows, and stronger economic buffers.
For 2026, the Federal Government set an ambitious production target of 2.6 million barrels per day, while adopting a more conservative benchmark of around 1.8 million barrels per day for budget planning.
With current output falling short, the gap highlights the scale of lost revenue opportunities and the urgency of addressing production constraints in Africa’s largest oil-producing nation.
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