Economy
Nigeria, Others May Suffer as Saudi Predicts Crude Oil Crash to $50
By Adedapo Adesanya
A prominent member of the Organisation of the Petroleum Exporting Countries (OPEC), Saudi Arabia, has warned fellow crude producers that prices could slump to $50 per barrel, a move that would jeopardise Nigeria’s revenue.
Saudi Energy Minister, Mr Abdulaziz bin Salman, gave a stern warning to fellow OPEC+ ministers, saying this price decline may happen if other producers continue to flout their output quotas in the agreement, according to The Wall Street Journal on Wednesday, citing OPEC delegates who attended a conference call last week.
Nigeria which has a target of 1.5 million barrels per day has not been able to meet its quota, wavering around 1.3 million barrels per day in the last year, caused by infrastructural challenges and oil theft.
If prices go to the $50 mark as warned, it would spell doom for Nigeria, which benchmarked its crude oil price for the year at $77.96 per barrel in the 2024 appropriation act. Oil accounts for more than half of Nigeria’s earnings.
According to the American newspaper, the warning was interpreted by other producers as a veiled threat that Saudi Arabia is fed up with quota cheaters and could go for a price war to defend its market share.
The message from the Saudi minister was that “there is no point in adding more barrels if there isn’t room for them in the market,” a delegate who attended last week’s call told the Journal.
“Some better shut up and respect their commitments toward OPEC+,” was the message from OPEC’s top producer and leader, Saudi Arabia, according to the source.
Apart from its share of the OPEC+ cuts announced a year ago, Saudi Arabia is also voluntarily keeping another 1 million barrels per day off the market.
However, Iraq and Kazakhstan, on the other hand, have been major overproducers and have not kept their end of the deal.
It was reported recently that Saudi Arabia is prepared to bear temporary setbacks in oil prices and revenue because it is reversing course, regaining market share, and abandoning its unofficial $100 oil price aim.
Oil prices have remained low due to persistent overproduction by some OPEC+ producers, as the market believes there is plenty of supply from both OPEC+ and non-OPEC+ sources to satisfy the weak demand.
During last week’s call, Prince Abdulaziz bin Salman reportedly singled out these two producers – OPEC’s second-largest producer Iraq, and non-OPEC producer Kazakhstan.
The Kingdom and Russia fought for market share in the early months of the pandemic in 2020 as a result of declining demand, which was the last time Saudi Arabia engaged in a pricing war.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited rebounded by 0.46 per cent on Tuesday despite continued weak investor sentiment due to low confidence in the market.
The gains recorded yesterday were largely impacted by significant trades in First Holdco by a major shareholder of the financial institution.
In terms of price gainers and losers, the bears won the race, as 28 equities closed in the red and 24 equities ended in the green, indicating a negative market breadth index.
Learn Africa grew by 10.00 per cent to N9.90, First Holdco expanded by 9.98 per cent to N72.15, Thomas Wyatt rose by 9.80 per cent to N2.69, RT Briscoe improved by 8.68 per cent to N13.15, and Transcorp Hotels increased by 8.37 per cent to N242.00.
Conversely, International Energy Insurance lost 9.86 per cent to close at N4.66, Legend Internet slipped by 9.18 per cent to N4.45, Fortis Global Insurance decreased by 7.67 per cent to N2.77, FTN Cocoa tumbled by 7.55 per cent to N8.21, and International Breweries dropped 4.79 per cent to trade at N13.90.
Business Post reports that First Holdco led the activity chart with a turnover of 326.9 million units worth N22.3 billion. GTCO traded 22.5 million units valued at N2.8 billion, Access Holdings transacted 18.5 million units for N461.6 million, FCMB sold 16.1 million units worth N166.8 million, and Zenith Bank exchanged 15.9 million units valued at N1.7 billion.
At the close of business, a total of 634.8 million stocks valued at N53.3 billion exchanged hands in 42,494 deals versus the 523.5 million stocks sold for N22.3 billion in 59,945 deals on Monday, indicating a shortfall in the number of deals by 29.11 per cent, and a surge in the trading volume and value by 21.26 per cent and 139.01 per cent, respectively.
The All-Share Index (ASI) was up during the trading day by 1,121.33 points to 242,870.44 points from 241,749.11 points, and the market capitalisation gained N719 billion to settle at N155.849 trillion compared with the previous day’s N155.130 trillion.
Market participants will be looking forward to the release of inflation data for June 2026 by the National Bureau of Statistics (NBS) today, Wednesday, July 15.
By Adedapo Adesanya
Oil prices climbed about 2 per cent to a one-month high on Tuesday after the US reportedly reimposed a naval blockade on Iran, which will reduce oil flows from the region through the Strait of Hormuz.
Brent futures rose by $1.43 or 1.7 per cent to settle at $84.73 per barrel, while the US West Texas Intermediate (WTI) crude increased by $1.20 or 1.5 per cent to $79.34 a barrel.
Brent closed at its highest since June 12, and WTI at its highest since June 15. The closing price increase kept Brent in technically overbought territory for a second day in a row for the first time since March.
Before the Iran war, about 20 per cent of global oil supplies flowed through the strait.
US President Donald Trump stepped back from a proposal to charge a 20 per cent fee to guard the Strait of Hormuz as part of the conflict with Iran, saying he would instead seek investment deals with Gulf states.
US forces had carried out waves of attacks for the third night after Iran said it had closed the strait. President Trump on Monday reinstated a blockade of Iranian shipping and proposed the fee, but hours before the fee was to take effect, the American President said the strait was open to all shipping traffic except that of Iran.
The renewed attacks have fed doubts that a memorandum of understanding signed last month will lead to a permanent halt in the war that has disrupted global energy supplies and stoked inflation fears.
Data showed that US consumer inflation slowed more than expected in June as energy prices retreated, but financial markets still expect an interest rate hike from the Federal Reserve.
The Federal Reserve Chairman Kevin Warsh on Tuesday vowed to “do my job” if challenged by President Trump, who has said he wants the US central bank to cut interest rates and boost economic growth.
The American Petroleum Institute (API) estimated that crude oil inventories in the US fell by 564,000 barrels in the week ending July 10. In the week prior, US crude oil inventories fell by 399,000 barrels.
Although commercial crude oil inventories excluding the SPR have been falling rapidly for three months now, shedding just over 60 million barrels over the last twelve weeks, US crude inventories are only down 9.2 million barrels so far this year. The US Energy Information Administration (EIA) will release its report later on Wednesday.
By Adedapo Adesanya
The 700,000 barrels per day Dangote Petroleum Refinery has begun pricing fuel products for the local market in US Dollars amid crude supply challenges.
The company cited difficulties securing sufficient crude under the government’s Naira-for-crude programme and rising global oil prices as reasons for the development.
The Naira-for-crude programme, launched in October 2024, allowed domestic refiners to purchase crude in the local currency and reduced pressure on the foreign exchange market.
Mr Edwin Devakumar, the vice president of the Dangote Group, said the refinery had been absorbing a currency mismatch by selling products in Naira while sourcing crude in Dollars, but limited crude supply under the Naira-for-crude programme had undermined the arrangement’s viability.
Dangote has now set the ex-depot price of petrol at $0.779 per litre, diesel at $1.087 per litre and aviation fuel at $0.942 per litre, according to a pricing template circulated to marketers.
Although the Nigerian National Petroleum Company (NNPC) Limited increased Dangote’s allocation to seven cargoes in May from about five previously, the refiner has said it requires 13 to 15 cargoes a month and has been forced to import the remainder at international prices.
The decision could boost demand for Dollars among fuel marketers and make domestic fuel prices more sensitive to exchange-rate fluctuations.
Dangote Refinery is steadily ramping up operations toward full capacity after a gradual start since late 2023. In April alone, it received 21 separate crude cargoes, with all supplies coming from West Africa, mainly Nigerian crude grades, with one cargo from Cameroon; however, it boosted international cargoes in recent months.
The refinery has been broadening the range of crude grades it processes as part of its ambition to operate as a fully merchant refinery. In 2025, about 70 per cent of the refinery’s crude imports came from Nigeria, while 24 per cent originated from the United States.
Dangote plans to double the refinery’s processing capacity to 1.4 million barrels per day by the end of 2028, a level that would enable it to process about 80 per cent of Nigeria’s recent crude oil production in a single day.
