Economy
UAE OPEC Exit Presents Operational, Financial Test for Nigeria’s Oil Target
A new report by EBC Financial Group has projected that the planned exit of the United Arab Emirates (UAE) from the Organisation of the Petroleum Exporting Countries (OPEC) on Friday, May 1, 2026 (tomorrow), could post a threat to Nigeria, a member of the oil cartel.
In a note made available to Business Post, it said the immediate challenge for Nigeria, Africa’s largest oil producer, involves managing crude volatility and ensuring production is translated into loaded cargoes, refinery feedstock, settled USD receipts, and controlled fuel-cost pass-through.
It was emphasised that the decision of the UAE does not automatically strengthen the oil position for Nigeria, but shifts attention from crude-price exposure to operational execution.
Nigeria’s 2026 fiscal framework, as outlined by President Bola Tinubu, sets a crude oil benchmark price of 64.85 per barrel, a production target of 1.84 million barrels per day, and an exchange rate assumption of N1,400 per Dollar.
The 2026 Appropriation Bill of N68.32 trillion, approved by Mr Tinubu about two weeks ago, provides for aggregate expenditure of N68.32 trillion. Reduced oil receipts may limit USD inflows into the financial system, affecting the ability of banks, importers, and manufacturers to settle overseas invoices. This scenario could constrain foreign exchange (FX) liquidity, delay import settlements, prolong government and contractor payment cycles, and result in broader pricing buffers for imported inputs.
Oil production figures remain variable. OPEC’s April Monthly Oil Market Report recorded Nigeria’s crude production at 1.38 million barrels per day in March, up from 1.31 million barrels per day in February, yet below the quota of 1.5 million barrels per day from OPEC.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) later reported that daily crude production had reached 1.84 million barrels per day, after a February reduction attributed to incidents at strategic facilities and maintenance activities. The focus is on whether Nigeria can sustain elevated output through all stages—pipelines, terminals, cargo loading, export payment, and FX conversion.
“Nigeria has demonstrated the distinction between setting oil targets and delivering oil revenue. Recent production figures reflect progress; however, market participants focus on consistency rather than isolated results.
“The key consideration is whether volatility in crude markets can be translated into loaded cargoes, settled USD receipts, and sufficient FX liquidity to reduce pricing buffers on import invoices,” the Senior Market Analyst at EBC Financial Group, Mr David Precious, noted.
First Test: Ensure Effective Dispatch of Export Barrels
The commercial challenge extends beyond production figures. Crude oil must be evacuated from production fields, metered at custody-transfer points, scheduled through export terminals, documented for lifting, loaded onto vessels, and paid for before generating usable USD proceeds for reserves, public revenue, and private-sector FX demand. A barrel measured at the wellhead does not support the Nigerian naira (NGN) market until the export process is finalised and proceeds enter the financial system.
Disruptions in pipelines, terminals, vessel nominations, or payment settlements widen the gap between production and accessible USD proceeds. Pipeline interruptions may delay evacuation, terminal congestion can extend vessel waiting times, nomination changes may shift loading windows, and payment delays can slow the conversion of oil sales into available FX. Such delays may increase working-capital requirements for importers, slow public cash disbursement, expand supplier pricing buffers, and elevate raw-material costs for manufacturers reliant on FX for overseas payments.
Second Test: Secure Domestic Refinery Feedstock Before Product Prices Reprice
EBC highlights that Nigeria’s next priority is domestic crude allocation. NUPRC has identified Domestic Crude Oil Supply Obligation (DCSO) issues, including contracts that failed to reflect legal provisions, reluctance by some producers to allocate production to domestic refineries, changes in vessel nomination, delayed vessel arrival and frequent lay-can changes for crude allocated to domestic refineries. These are not administrative issues alone. Delayed feedstock disrupts refinery run planning, increases storage exposure, creates demurrage risk, delays product release from depots and raises trucking costs.
DCSO enforcement becomes more important if global crude volatility raises refined-product prices. Local refineries require predictable crude supply schedules and workable payment terms to reduce dependence on import-parity pricing. Irregular feedstock supply exposes petrol, diesel and aviation fuel to higher shipping, insurance, depot and FX conversion costs. Those costs move into factory generator diesel, trucking rates for food and cement, jet fuel for airlines, inventory finance for wholesalers and operating margins for retailers.
Third Test: Turn Atlantic Basin Geography into Reliable Cargo Supply
The International Energy Agency (IEA) said early-April shipments of crude, natural gas liquids and refined products through the Strait of Hormuz averaged around 3.8 million barrels per day, compared with more than 20 million barrels per day in February before the crisis. The IEA also said alternative-route exports had increased to 7.2 million barrels per day from less than 4 million barrels per day before the war, while global crude and refined-product markets remained under pressure.
Nigeria’s Atlantic Basin location gives buyers an alternative to Gulf-linked supply routes, but that advantage only has commercial value if cargoes load reliably. When Nigerian cargoes are loaded on schedule, buyers can plan refinery intake, banks can process trade finance with fewer timing buffers, and exporters can convert crude sales into USD more quickly. When cargoes are delayed, vessel waiting time, financing cost and supply-chain uncertainty rise, reducing any buyer-confidence advantage Nigeria could gain from offering non-Gulf cargoes during a disrupted physical market.
Fourth Test: Separate Export Gains from Domestic Cost Pass-Through
Higher crude prices can increase Nigeria’s export revenue, but the benefit does not reach the economy as quickly as fuel-cost increases. Export receipts support fiscal revenue and USD liquidity only after production, lifting, invoicing and payment. Refined-product costs can be re-priced more quickly through depots, trucking contracts and supplier invoices. That timing gap can raise diesel, petrol, aviation fuel, lubricants, plastics, packaging, and imported manufacturing input costs before higher public revenue reaches the broader economy.
EBC analysts noted that the commercial impact shows up in operating margins. Manufacturers face higher generator diesel and imported raw material costs. Logistics firms face higher truck-fuelling costs. Airlines face higher aviation-fuel costs. Wholesalers face higher inventory-finance requirements. Retailers face pressure to pass higher landed costs to consumers. This is why Nigeria’s oil upside depends not only on crude prices, but on how quickly export proceeds become usable USD and how predictably domestic fuel supply reaches depots.
What Comes Next for Nigeria
The first external checkpoint is the May 3, 2026, OPEC+ meeting. OPEC said eight participating countries agreed to implement a 206,000-barrel-per-day production adjustment in May, retain flexibility to increase, pause or reverse the phase-out of voluntary adjustments, and meet monthly to review market conditions, conformity and compensation. For Nigeria, the meeting will show whether producer coordination remains firm after the UAE’s exit and how participating countries position future output adjustments.
Nigeria’s internal benchmarks are now measurable. Production needs to stay close to the 1.84 million-barrel fiscal reference. Export terminals need to show timely cargo loading. DCSO enforcement needs to reduce lay-can changes and refinery feedstock uncertainty. FX liquidity needs to show that export receipts are reaching importers and manufacturers quickly enough to reduce pricing buffers across fuel, food distribution, factory power and consumer goods.
“The UAE is moving towards greater production flexibility, but Nigeria’s issue is different,” Mr Precious added. “Nigeria has to protect the chain from production to payment. If a cargo misses its loading window, refinery feedstock planning changes. If refinery planning changes, depot release timing changes. If depot timing changes, trucking, factory power and consumer prices absorb the cost before higher export revenue reaches the broader economy.”
The UAE’s exit does not determine Nigeria’s oil outcome. It highlights the execution chain Nigeria must now protect: production, evacuation, lifting, payment, FX conversion, refinery feedstock and final fuel pricing. Nigeria’s commercial benefit will depend on converting capacity into reliable cargoes and reliable cargoes into usable cash.
By Dipo Olowookere
The first trading session of the week on the floor of the Nigerian Exchange (NGX) Limited ended in the green territory on Monday, with a 1.20 per cent rise.
This was buoyed by the gains recorded by Airtel Africa and other equities, according to analysis of data harvested from the Customs Street yesterday.
During the trading day, the consumer goods index grew by 0.76 per cent, enough to offset the losses recorded by the other sectors.
The insurance counter shrank by 1.64 per cent, the banking space lost 0.24 per cent, the energy sector contracted by 0.09 per cent, and the industrial goods segment retreated by 0.05 per cent.
When trading activities ended for the day, the All-Share Index (ASI) was up by 2,956.15 points to 248,529.75 points from 245,573.60 points, and the market capitalisation gained N1.909 trillion to finish at N160.422 trillion compared with the previous session’s N158.513 trillion.
Fortis Global Insurance expanded by 10.00 per cent to N2.86, Chams surged by 9.80 per cent to N4.48, NAHCO jumped by 9.29 per cent to N153.00, Airtel Africa soared by 8.59 per cent to N6,300.00, and Sovereign Trust Insurance rose by 6.59 per cent to N1.78.
Conversely, AVA Capital shed 10.00 per cent to N9.90, Ecobank decreased by 9.92 per cent to N64.95, Caverton crashed by 9.09 per cent to N5.00, Ikeja Hotel slipped by 8.41 per cent to N43.00, and FTN Cocoa dropped 8.37 per cent to trade at N8.10.
A total of 23 equities were on the gainers’ chart yesterday, while 37 equities ended on the losers’ table, indicating a negative market breadth index and weak investor sentiment.
As for the activity log, the trading volume remained elevated, though lower than the preceding session, as it receded by 26.67 per cent to 1.1 billion units from 1.5 billion units. The trading value, however, increased by 1.12 per cent to N27.0 billion from N26.7 billion, while the number of deals advanced by 39.00 per cent to 59,185 deals from 42,580 deals.
Consolidated Hallmark was the most active stock yesterday, with a turnover of 354.1 million units valued at N1.5 billion, Fortis Global Insurance traded 307.3 million units worth N818.3 million, Access Holdings exchanged 48.1 million units for N1.4 billion, Chams transacted 37.4 million units worth N163.3 million, and First Holdco sold 35.8 million units valued at N5.1 billion.
By Adedapo Adesanya
Oil prices traded 5 per cent higher on Monday after Iran and the United States argued about demands for compensation, further stalling a possible deal to reopen the Strait of Hormuz.
Brent crude futures chalked up $4.17 or 4.99 per cent to sell at $87.72 a barrel, while the US West Texas Intermediate (WTI) crude futures surged $3.95 or 5.05 per cent to $82.13 per barrel.
Iran said the US must lift sanctions on it and meet other conditions for reopening the vital waterway, which carried a fifth of the world’s oil and liquefied natural gas before the start of the Middle East conflict in late February.
Meanwhile, US President Donald Trump said Iran must pay compensation for “all of the people that they have killed and gravely wounded.”
This comes as the Middle East country said it was nearing a final pact with Oman to define new shipping lanes through the strait but repeated that the US must meet other conditions, including compensation and an end to sanctions and military threats before the strategic waterway is reopened.
In a further threat to supply, the Iran-aligned Houthis said they had struck Saudi Aramco’s Jazan refinery on Sunday. Saudi Aramco has postponed the restart of the 400,000-barrel-per-day refinery to August 30 after two Houthi attacks in recent weeks.
ADNOC, a state-owned oil company in the United Arab Emirates, said on Friday that 15 of its vessels had been attacked while transiting the Strait of Hormuz since the beginning of the conflict.
Meanwhile, Ukraine’s military continued to attack Russia’s energy infrastructure, hitting the Taneco oil refinery in Tatarstan and the ZapSibNeftekhim petrochemical plant in Russia’s Tyumen region.
On the US supply side, stocks of crude oil in the Strategic Petroleum Reserve (SPR) fell by about 6.1 million barrels to 298.7 million barrels last week, the lowest level since January 1983.
Bank of America (BoFA) warned that oil prices could continue climbing into the winter if the US and Iran fail to reach an agreement reopening the Strait of Hormuz, with severe shortages already emerging in diesel, petrol, and global natural gas markets.
Mr Francisco Blanch, Bank of America’s head of commodities and derivatives research, told CNBC on Monday that only around 5 to 10 ships per day are currently passing through Hormuz, compared with roughly 140 before the war. With some crude now being rerouted through Saudi Arabia and the UAE, traffic would need to recover to around 80 to 100 ships per day just to stabilise energy markets.
By Adedapo Adesanya
The Senate Committee on Banking, Insurance and Other Financial Institutions has called for stronger collaboration among financial sector regulators and other stakeholders to strengthen Nigeria’s financial system and support sustainable economic growth.
The committee made the call during an expanded stakeholders’ engagement in Lagos, attended by the leadership of the Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC), Asset Management Corporation of Nigeria (AMCON), National Insurance Commission (NAICOM) and Nigeria Export-Import Bank (NEXIM), among other industry stakeholders and financial experts.
Chairman of the committee, Mr Adetokunbo Abiru (Lagos East), who was represented by Mr Osita Izunaso (Imo West), said stronger legislative reforms and regulatory collaboration were necessary to reposition Nigeria’s financial architecture for long-term economic prosperity.
Mr Abiru said the financial sector remained critical to investment, job creation, business expansion and macroeconomic stability, stressing that its ability to mobilise savings, channel credit to productive sectors, facilitate investment and manage risks was fundamental to sustainable economic growth.
He said the current economic realities required closer collaboration between the legislature and financial regulators, noting that challenges confronting the sector were interconnected and could not be effectively addressed through isolated interventions.
The lawmaker identified inflationary pressures, global economic uncertainties, cybersecurity threats, low insurance penetration and the need to diversify Nigeria’s export base as some of the challenges requiring coordinated policy responses.
He said the engagement was aimed at generating practical solutions to strengthen the country’s financial architecture and support sustainable economic growth.
According to him, monetary policy, financial safety nets, banking institutions, the insurance industry and export finance were interdependent components of a stable financial system and must therefore be strengthened collectively.
The Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM), Mr Olusegun Ayo Omosehin, said the Nigeria Insurance Industry Reform Act (NIIRA) 2025 had contributed significantly to stabilising and repositioning the insurance sector.
Mr Omosehin disclosed that 43 insurance companies had successfully recapitalised, describing the development as a major milestone for the industry.
He commended Abiru and members of the committee for their role in advancing insurance sector reforms and urged the House of Representatives to expedite action on the relevant insurance reform bill to enable it to receive presidential assent and become operational.
Representatives of the CBN Governor and the Managing Directors of AMCON, NEXIM and NDIC also commended the Senate committee for its oversight and legislative support, saying its interventions had strengthened the agencies’ capacity to discharge their statutory mandates.
The engagement, held under the theme, Strengthening Financial System Architecture for Sustainable Economic Growth and Stability in Nigeria, also featured presentations by Professor Uche Uwaleke, President of Capital Market Academics of Nigeria (CMAN); Professor Biodun Adedipe, Chief Consultant, B. Adedipe Associates Limited; and Dr Tilewa Adebajo, Chief Executive Officer of CFG Advisory.
The experts presented policy recommendations on key issues affecting Nigeria’s financial system, with emphasis on financial stability, investment and sustainable economic growth.
Mr Abiru said the Senate would continue to engage financial regulators and other stakeholders to deepen financial inclusion, strengthen public confidence in financial institutions and improve regulatory effectiveness.
He said the broader objective was to position Nigeria’s financial system to compete more effectively in the global economy while remaining resilient and responsive to the country’s economic transformation agenda.
