Nigeria’s daily crude oil production rose to 1.505 million barrels per day (bpd) in June 2025, marking the highest output recorded since January, according to the Organization of the Petroleum Exporting Countries (OPEC).
The increase, though a welcome improvement, still falls short of the oil benchmark used to structure Nigeria’s 2025 national budget, stirring renewed concern over the country’s fiscal projections.
In its latest Monthly Oil Market Report released on Tuesday, OPEC disclosed that the production figures were sourced through direct communication with Nigerian authorities. It represents a 3.58 percent uptick from the 1.453 million bpd recorded in May. OPEC’s secondary sources, which track shipments and oilfield activity, put Nigeria’s output slightly higher at 1.547 million bpd.
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June’s production means Nigeria met its OPEC-assigned quota of 1.5 million bpd for the second time this year. It also helped the country retain its position as Africa’s top oil producer, ahead of Algeria’s 927,000 bpd.
Progress, But Not Enough
Despite the rebound, analysts say the figure raises red flags for Nigeria’s broader economic stability, particularly given that crude oil remains the country’s top source of revenue and foreign exchange. Nigeria’s 2025 budget was pegged at an ambitious production target of 2.06 million bpd, while the 2024 budget had projected 1.78 million bpd — both well above the current output.
“Nigeria just hit 1.5 million bpd oil output, which funds the federation. The 2025 budget projection is 2.06 million bpd. The 2024 budget projection is 1.78 million bpd. Nigeria will run the 2025 budget plus the capital budget of 2024 in 2025—yes, two budgets—yet it has not hit the oil output target in either year,” noted financial analyst and economist, Kalu Aja.
The mismatch between oil output and budget projections spells potential fiscal instability. With insufficient crude volumes to meet revenue expectations, Nigeria may be forced to rely more heavily on borrowing or increase its dependence on non-oil revenue — a risky move amid declining tax compliance and subdued economic growth.
OPEC’s Global Outlook and Nigeria’s Role
In the wider context, OPEC reported that total crude production among countries in the Declaration of Cooperation (DoC) rose by 349,000 bpd in June, bringing collective output to 41.56 million bpd. OPEC+ had earlier this month agreed to increase global supply by 548,000 bpd starting in August, responding to tightening supply dynamics and resurgent demand.
But beneath the surface, OPEC’s leadership continues to warn of future global supply risks. At the 24th Nigeria Oil and Gas (NOG) Energy Week Conference in Abuja, OPEC Secretary-General Haitham Al Ghais warned that the world could face a shortfall of 23 million bpd by 2030 if upstream investment lags.
According to Al Ghais, over $17.4 trillion in oil sector investment is needed globally to prevent that shortfall and meet projected energy demand. The warning is particularly relevant for Nigeria, where aging infrastructure, oil theft, pipeline vandalism, and underinvestment have hampered recovery.
The OPEC report also revealed an increase in oil exports to OECD countries, with preliminary data showing commercial inventories rose to 2.771 billion barrels in May, up 34.5 million barrels from April. Despite the month-on-month rise, OECD inventories remain 127.7 million barrels below the latest five-year average and 184.2 million barrels below the 2015–2019 benchmark, indicating sustained pressure on global supply chains.
Outlook for Nigeria
With June’s production numbers offering only a partial relief, the Nigerian government now faces mounting pressure to aggressively stabilize and scale output. The Petroleum Industry Act (PIA), passed in 2021 to overhaul the sector, has yet to fully deliver expected results. Analysts say improving security in the Niger Delta, enhancing operational transparency, and attracting fresh investment remain critical steps.
However, the gap between oil production and budget expectations looms large, and could define whether Nigeria navigates the 2025 fiscal year with relative stability or deeper financial strain.