Nigeria’s crude oil revenue is currently experiencing an upswing, with its benchmark crude blend, Bonny Light, trading at $78 per barrel on Friday. This favorable price significantly surpasses the Federal Government’s budgeted benchmark of $75 per barrel for the N55 trillion 2025 national budget, offering a boost to the nation’s financial outlook.
Market data on Friday showed Bonny Light specifically priced at $78.62 per barrel. Other global crude blends exhibited varying prices, with Saharan at $67.18, Girassol at $79.56, and Arab Light at $65.72 per barrel. The Nigerian government had based its 2025 budget on an ambitious production target of over two million barrels per day (bpd), including condensate, alongside the $75 per barrel price benchmark.
Oil prices saw a modest climb of a few cents on Tuesday, driven by market anticipation of upcoming U.S.-China trade talks in London. Brent crude futures gained 29 cents, reaching $65.31 a barrel by 1:31 PM WAT, with Bonny Light typically commanding a premium over Brent.
Major oil benchmarks have largely remained above the $60 range following a notable sell-off in early April. This earlier downturn was triggered by OPEC+’s announcement to gradually unwind voluntary production cuts totaling 2.2 million barrels per day, coupled with renewed concerns over potential impacts of President Trump’s trade war rhetoric on hydrocarbon markets. Eight OPEC+ countries have committed to a steady output increase of 410,000 barrels per month through at least July.
Despite the recent price gains, Nigeria continues to struggle with its crude production targets. The nation has consistently fallen short of its 2.06 million bpd benchmark, only achieving 1.6 million bpd (including condensates) in March. Actual crude production has hovered between 1.4 million bpd and 1.5 million bpd since the fourth quarter of last year, according to OPEC data.
The recent surge in crude prices comes amidst a backdrop of revised, lower oil price forecasts from prominent financial institutions. Goldman Sachs, for the third time in a single month, slashed its oil price outlook. Analysts at Goldman now project Brent crude prices to average $60 per barrel this year, a reduction from their previous forecast of $63. The average price for the US benchmark, WTI crude, has also been downgraded to $56 for 2025, from $59 previously. Looking ahead, Goldman expects Brent to average $56 per barrel next year (down from $58) and WTI to average $52 (down from $55).
Similarly, Barclays has lowered its Brent oil price forecast by $4 to $66 per barrel for 2025 and by $2 to $60 per barrel for 2026. This adjustment is primarily attributed to the accelerated oil production hikes by OPEC+. Barclays now anticipates OPEC+ to phase out additional voluntary adjustments by October 2025, though it also foresees slightly slower U.S. oil output growth. These factors are expected to loosen their balance estimates by 290,000 bpd for 2025 and 110,000 bpd for 2026.
Morgan Stanley has also joined other major investment banks in cutting oil price forecasts, citing expectations of a larger market surplus later this year. The bank revised down its projection for Brent Crude prices to $62.50 per barrel in the third and fourth quarters of this year, a $5 per barrel cut from its previous forecast. Morgan Stanley now estimates that the market glut could reach 1.1 million bpd in the second half of the year, an upward revision of 400,000 bpd from its prior surplus forecast.
