Nigeria’s crude oil production surged to 1.53 million barrels per day (bpd) in January, marking a significant milestone as the country met its Organization of Petroleum Exporting Countries (OPEC) production quota for the first time since it was set at 1.5 million bpd for the 2024 period.

The production target, established at OPEC’s ministerial meeting on November 30, 2023, had remained elusive for over a year, prompting concerns over Nigeria’s ability to sustain output levels amid persistent challenges in the sector.

OPEC’s latest monthly oil market report, released on Wednesday, cited figures from direct communication with Nigerian authorities confirming the increase in production. The report indicated that January’s crude output represents a 54,000 bpd or 3.6 percent increase from the 1.48 million bpd recorded in December 2024. This development cements Nigeria’s position as Africa’s largest oil producer, surpassing Algeria, which recorded an output of 907,000 bpd in the same period. Congo, with an output of 251,000 bpd, ranked as the third-largest producer on the continent.

OPEC also noted that secondary sources, such as energy intelligence platforms, reported a slight decline in Nigeria’s crude production. According to these alternative estimates, production fell by 2 percent to 1.49 million bpd in January, down from 1.52 million bpd in December 2024. This discrepancy between data sources is not uncommon in oil reporting and underscores ongoing concerns over production transparency and the reliability of figures.

Beyond Nigeria, the broader OPEC-12 crude oil production saw a marginal decline, averaging 40.62 million barrels per day in January 2025, which represents a 118,000 bpd decrease compared to the previous month. While Libya, Congo, and Gabon recorded increased output, production levels in Nigeria, the United Arab Emirates (UAE), and Venezuela declined. Additionally, non-OPEC+ crude production averaged 13.94 million bpd, with notable increases from Kazakhstan, while Russian production declined.

Oil Revenue and Nigeria’s Increasing Budget Deficit Concerns

The surge in Nigeria’s oil production comes at a critical time as President Bola Tinubu recently submitted a revised 2025 budget to the National Assembly, increasing it from N49.7 trillion to N54.2 trillion. The latest adjustment, which the President attributed to additional revenue projections from key government agencies, has raised concerns among economic analysts and political observers that Nigeria may be heading toward another significant budget deficit.

With Nigeria’s debt profile already a growing concern, the increase in government spending, combined with the fluctuating performance of key revenue sources, has sparked debates about how the administration plans to finance the new budget without further deepening the country’s fiscal crisis. Nigeria has struggled with revenue generation, with oil remaining the country’s primary source of foreign exchange earnings despite ongoing efforts to diversify the economy.

Thus, the latest oil production increase is expected to positively impact government revenue if sustained, offering the administration a much-needed boost to fund the expanded budget. Crude oil accounts for over 80 percent of Nigeria’s foreign exchange earnings.

However, economic analysts warn that while increased oil production is a positive development, Nigeria’s ability to fully capitalize on rising output will depend on global oil prices, production stability, and efficient revenue management. If crude prices remain strong and Nigeria maintains or exceeds the 1.5 million bpd quota, it could partially offset the budgetary strain and reduce the country’s reliance on external borrowing. However, if production levels fluctuate due to oil theft, vandalism, or regulatory challenges, the expected financial relief may not materialize.

Dangote Refinery’s Role in Strengthening Nigeria’s Oil Sector

OPEC’s report also highlighted expectations that Nigeria’s crude oil production would rise further in the coming months, thanks to the Dangote Refinery’s progress toward full operational capacity. The refinery, Africa’s largest, is set to transform Nigeria’s energy sector by reducing dependency on imported petroleum products while creating a reliable domestic market for locally produced crude.

“The oil sector remains central to the economy, and the Dangote Refinery reaching full production capacity should help stabilize the petroleum product supply and possibly lower petrol prices,” OPEC noted in the report.

Edwin Devakumar, vice president of Dangote Industries Limited (DIL), recently stated that the refinery is expected to reach full capacity within 30 days. At peak operation, the facility will process approximately 650,000 barrels of crude per day, an output level experts believe is more than sufficient to meet Nigeria’s domestic demand for petroleum products while allowing surplus refining for export.

Can Nigeria Reach 3 Million Bpd by 2025?

Following the positive momentum, the federal government has set an even more ambitious target of achieving 3 million bpd by 2025, according to Heineken Lokpobiri, Minister of State for Petroleum Resources (Oil). However, this goal remains challenging, given the persistent issues of oil theft, pipeline vandalism, underinvestment in exploration, and an aging infrastructure.

Security concerns play a major role in output fluctuations. The Niger Delta, Nigeria’s oil-producing region, has long been plagued by pipeline sabotage and oil theft, with billions of dollars lost annually to illicit activities. The government’s ongoing security interventions have yielded mixed results, and industry experts warn that without a lasting solution, maintaining steady production above 1.5 million bpd will remain a struggle.

Moreover, while the Dangote Refinery promises to ease Nigeria’s dependence on imported refined petroleum products, it also presents a new dynamic for the country’s crude oil market. If the refinery sources the majority of its feedstock domestically, it could alter Nigeria’s export patterns and impact government revenues.

Apple has announced a partnership with Alibaba to bring artificial intelligence (AI) features to iPhones in China, marking a crucial shift in its strategy to revive smartphone sales in the world’s largest smartphone market.

The move comes as Apple Intelligence, the company’s new suite of AI-powered features, remains unavailable in China, a major disadvantage against domestic rivals like Huawei and Xiaomi, which have aggressively integrated AI into their latest devices.

Speaking on the partnership, Alibaba chairman Joseph Tsai expressed his company’s enthusiasm for collaborating with Apple. He stated that Apple had spoken to several companies in China before ultimately deciding to partner with Alibaba, as they wanted to use its AI to power their phones.

“They talked to a number of companies in China. In the end they chose to do business with us. They want to use our AI to power their phones,” Alibaba chairman Joseph Tsai said. “We feel extremely honoured to do business with a great company like Apple.”

While Apple’s deal with Alibaba is a strategic move to address its competitive struggles in China, it also represents a new approach by global tech companies caught in the escalating tech and trade war between Beijing and Washington. As both countries increase restrictions on AI and advanced semiconductor technologies, American and Chinese companies are turning inward, forming domestic partnerships to stay competitive while avoiding regulatory pitfalls.

AI breakthroughs from China, such as DeepSeek, are already being blocked from entering the US as Washington ramps up national security measures to curb China’s progress in artificial intelligence. Meanwhile, American AI models—including OpenAI’s ChatGPT—are not available in China due to Beijing’s strict regulatory framework on foreign AI companies.

With neither side willing to allow foreign AI dominance within their borders, a new pattern of domestic AI partnerships is emerging. In the US, companies like Apple, Microsoft, and Google are building AI ecosystems around homegrown AI labs, avoiding reliance on Chinese advancements. In China, tech giants such as Alibaba, Baidu, and Tencent are stepping in to fill the void left by restricted access to American AI models.

Apple’s partnership with Alibaba aligns with this new reality. Instead of relying on OpenAI’s ChatGPT, which powers Apple Intelligence outside China, Apple is turning to a Chinese company to provide AI capabilities within the country—ensuring it remains compliant with Beijing’s rules while keeping up with domestic competition.

China has implemented strict AI regulations that require all generative AI models to be registered and approved by the government before they can be made available to the public. Companies must ensure their AI outputs align with government guidelines on censorship and security. These restrictions have made it impossible for Apple to simply bring its AI model from the US into China, forcing it to rely on local partners like Alibaba.

According to a report from The Information, Apple is also working with Baidu on an AI-powered search feature capable of handling both images and text, alongside planned upgrades to the Chinese version of Siri.

While the Alibaba deal is significant, it is unclear whether Apple will also partner with Tencent, ByteDance, or DeepSeek, all of whom were initially evaluated for their AI capabilities. Apple and Alibaba have already submitted materials to Chinese regulators for approval of their AI-powered features, underscoring the company’s careful navigation of China’s regulatory landscape.

Apple’s AI rollout in China is not just about compliance—it is a matter of survival in an increasingly difficult market. The company has been losing ground to domestic competitors, with iPhone sales experiencing a significant decline in 2024. In the fourth quarter of 2024, Apple dropped to third place in China’s smartphone market, trailing behind Huawei and Xiaomi.

Analysts attribute Apple’s decline in China to several factors. Chinese consumers are rapidly embracing AI-powered smartphones, and Apple’s failure to introduce AI in China has put it at a disadvantage. With the return of Huawei’s 5G smartphones, powered by homegrown Kirin chips, many former iPhone users have switched to Huawei. Apple’s premium pricing strategy is also becoming harder to justify in China, where brands like Xiaomi offer flagship AI-powered phones at lower prices.

Apple’s reliance on Alibaba for AI in China is a clear sign that the tech war between the US and China is leading to a complete decoupling of AI ecosystems. In the US, former President Joe Biden’s administration intensified efforts to restrict China’s AI progress, banning the export of advanced Nvidia chips used for AI model training. Washington is also considering new regulations that would prevent US companies from investing in Chinese AI startups.

In China, authorities are tightening data security and AI regulations, ensuring that all AI models comply with government policies before deployment.

This means that Chinese AI models like DeepSeek will never be allowed into the US, just as ChatGPT and other US-developed AI tools are banned in China. The result is that American companies must rely on US AI models and Chinese companies must rely on domestic AI models, leading to a world where AI innovation is increasingly divided along geopolitical lines.

With Apple’s smartphone sales declining in China, the company is under pressure to adapt to the country’s AI-driven smartphone revolution. Analysts believe that if Apple successfully integrates Alibaba’s AI into iPhones, it may win back some market share. However, time will tell the extent of the partnership and whether Alibaba’s AI capabilities can match the competition from Huawei and Xiaomi.