President Donald Trump’s executive order and declaration of a national energy emergency, aimed at boosting U.S. oil and gas production, could significantly impact Nigeria’s oil demand and revenue. The move comes as the price of oil, including Nigeria’s Bonny Light crude, fell from $83 per barrel to $80, with traders awaiting clarity on Trump’s energy policy agenda after his inauguration.
The United States, which once imported a significant portion of its crude oil from Nigeria, has reduced its imports due to the rise of shale oil production, government policies, and other factors. Despite this reduction, recent data revealed that U.S. oil and gas imports from Nigeria were valued at $4.73 billion in 2023.
Experts believe that Nigeria’s oil revenue could see a decline in 2025 and beyond, as Trump’s national energy emergency is likely to result in increased U.S. production, expanding global supply and potentially lowering energy prices.
Dr. Muda Yusuf, an economist and Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), told Hobnob News that a rise in U.S. oil and gas investments would increase global supply, which could lead to a drop in energy prices. This decrease would likely hurt Nigeria’s oil revenue, although businesses could benefit from reduced fuel costs, including for petrol, diesel, and jet fuel.
Yusuf explained that lower energy prices would reduce costs for citizens and investors, while higher prices would benefit governments but harm the private sector. He also highlighted that a potential de-escalation in the Russia-Ukraine conflict could impact global energy markets, as Russia is a key oil and gas producer. If Trump succeeds in easing tensions between the two nations, it could further affect global oil prices.
This shift in U.S. energy policy presents both challenges and opportunities for Nigeria’s oil sector as it navigates changes in global demand and market dynamics.
