Economy
Crude Oil Prices Soar Over US Storm Disruption
By Adedapo Adesanya
On Thursday, Brent crude futures rose by $1.70 or 2.4 per cent to $72.31 per barrel and the US West Texas Intermediate (WTI) jumped by $1.91 or 2.8 per cent to $69.22 per barrel as producers assessed the damage to output in the Gulf of Mexico after Hurricane Francine tore through offshore oil-producing areas in the United States.
Analysts estimated that as much as 1.5 million barrels of Gulf of Mexico’s output was disrupted by the storm as companies evacuated more than 171 offshore platforms due to Francine.
The disruptions are estimated to have reduced output this month from the Gulf of Mexico by around 50,000 barrels per day.
Reuters reported that some analysts cautioned that Francine’s impact could be short-lived, as it lost intensity quickly after making landfall in Louisiana on Wednesday evening. This could sway the oil market’s attention back to a lack of global demand.
Also, since it made landfall as a Category 2 storm, there is a chance that the impact won’t last that long, even though the Governor of Louisiana declared a state of emergency.
On Thursday, the International Energy Agency lowered its 2024 demand growth forecasts by more than 7 percent to 900,000 barrels per day, citing weak demand in China and feeble growth in other regions.
This is after the Organisation of the Petroleum Exporting Countries and its allies, the OPEC+ producer group on Tuesday slashed its annual demand growth forecasts for the second month in a row.
Global oil demand growth in the first half of 2024 was only 800,000 barrels per day year-on-year, the lowest pace of growth since 2020, the IEA said in its closely-watched Oil Market Report.
The Paris-based agency said the main driver of the sluggish growth has been “a rapidly slowing China,” where oil consumption contracted on an annual basis for a fourth straight month in July, by 280,000 barrels per day.
Concerns about weak global oil demand, particularly from top importer China, have weighed heavily on prices in recent months.
The IEA now sees annual growth in global demand at 900,000 barrels per day this year, compared to 2.1 million barrels per day growth in 2023. The rise in demand for 2025 is seen at an equally subdued level of about 950,000 barrels per day.
The US, the world’s top oil consumer is also indicating weak demand as oil stockpiles rose in the country last week as crude imports grew, exports dipped, and fuel demand slumped, data from the Energy Information Administration (EIA) showed on Wednesday.
By Adedapo Adesanya
The United States has lamented Nigeria’s import ban on 25 different products, particularly in agriculture, pharmaceuticals, beverages, and consumer goods, as it rationalised the recent decision to slap a 14 per cent retaliatory tariff.
The United States Trade Representative, in a statement on Monday posted on its X platform, said Nigeria’s restrictions on items like beef, pork, poultry, fruit juices, medicaments, and spirits limit US market access and reduce export opportunities.
“These policies create significant trade barriers that lead to lost revenue for US businesses looking to expand in the Nigerian market,” it wrote.
Last week, the administration of President Donald Trump imposed various tariffs ranging between 10 per cent and 65 per cent on different countries across the world, including Nigeria which got a 14 per cent tariff on its exports to the US.
In response, the Nigerian Minister of Trade, Industry, and Investment, Mrs Jumoke Oduwole, said Nigeria would take a pragmatic approach and will boost non-oil exports to deal with the drawbacks from the US move.
She also said Nigeria will be willing to negotiate and will be speaking with the World Trade Organisation (WTO) on the way forward.
On his part, the Minister of Finance, Mr Wale Edun, said that the Economic Management Team (EMT) would meet to assess the likely impact of the 14 per cent tariff on goods exported from Nigeria to the US.
He said the EMT will afterwards, make recommendations to cushion its impact on the nation’s economy.
The Minister also said the federal government will boost non-revenue as a means of cushioning the adverse effects to trade tariffs imposed on countries by President Trump.
Mr Edun also assured that while the adverse effect on Nigeria will be through an oil price plunge, the government is intensifying efforts to ramp up oil production and boost non-oil revenues.
By Adedapo Adesanya
Nigeria and Japan have launched a strategic venture capital initiative that will channel Naira-denominated investments into high-growth startups, shielding them from currency risks while unlocking access to long-term concessional financing.
The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, met with officials from the Nigeria Sovereign Investment Authority (NSIA) and the Japan International Cooperation Agency (JICA) to finalise the framework of the fund, which has now received formal approval from the Japanese government.
Speaking on the development, Mr Edun welcomed the development, calling it a timely response to Nigeria’s youthful demography.
He said this fund provides critical financial backing across the capital structure—from equity to debt—and is aligned with President Bola Tinubu’s Renewed Hope Agenda for inclusive economic growth, he stated.
On his part, NSIA CEO, Mr Aminu Umar-Sadiq confirmed that the initiative satisfies two key conditions set by the Minister: mitigating foreign exchange volatility by investing in Naira and securing first-loss or grant capital to de-risk private investment.
“With JICA’s support, this is not just a proposed solution—it’s a fully approved, ready-to-launch initiative,” Mr Umar-Sadiq said.
By combining international concessional financing with domestic currency stability, the fund marks a new model for venture capital in Africa, aimed squarely at empowering the next generation of Nigerian innovators.
By Adedapo Adesanya
The Minister of Finance, Mr Wale Edun, has said the country’s Economic Management Team (EMT) would meet to assess the likely impact of the 14 per cent tariff on goods exported from Nigeria to the United States.
Mr Edun made the disclosure while speaking at an event organised by the Ministry of Finance Incorporated (MOFI) on Monday.
The Trump administration recently imposed various tariffs ranging between 10 per cent and 65 per cent on different countries across the world, including Nigeria which got a 14 per cent tariff on its exports to the United States.
He said the EMT will afterwards make recommendations to cushion its impact on the nation’s economy, noting that the federal government will boost non-revenue as a means of cushioning the adverse effects to trade tariffs imposed on countries by President Trump.
Mr Edun stated that while the adverse effect on Nigeria will result in an oil price plunge, the government is intensifying efforts to ramp up oil production and boost non-oil revenues.
The Finance Minister noted that the US, which is at the centre of the tariff war had on April 2, announced that it would exempt mineral exports, including oil.
“Therefore, it’s the price effect, the oil price effect that may affect Nigeria. And it is the job and responsibility of the economic management team of President Bola Ahmed Tinubu, amongst others, to look at the various scenarios that might play out.
“There’s global uncertainty at a huge level, so nobody knows exactly what will happen- the announcement that has been made. We’re not sure what will be delayed, what will be reversed, or what will be implemented.
“So, it is not an announcement that the budget is being reviewed. It’s an announcement that it is our responsibility to look at the various scenarios and options and advise government accordingly.”
Mr Edun also highlighted plans to look at budget adjustment, expenditure prioritisation as well as innovative non-debt financing strategies.
According to him, Nigeria had recorded a trade surplus in the last three years (2022-2024) with the US.
“Nigeria-US Trade has been in surplus in the last 3 years (2022-2024). Nigeria’s exports to the US were N1.8 trillion, N2.6 trillion and N5.5 trillion in 2022-2024, respectively.
“Fortunately, oil and mineral exports accounted for 92 per cent. Implying oil and minerals exports amounted to N5.08 trillion in value while non-oil was just N0.44 trillion.
“Consequently, the tariff effect on exports is negligible if we sustain our oil and minerals export volume.
“The adverse effect on Nigeria will be through oil price plunge. We are intensifying efforts to ramp up crude oil production to curtail any price effect
“We are also focusing on non-oil revenue mobilisation by FIRS and Customs, budget adjustment and prioritisation where possible, and also and innovative non-debt financing strategies,” the Minister said.
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