Nigeria’s crude oil earnings drop by 14.4% in 2025 despite output increase

NIGERIA earned $31.54 billion from crude oil exports in 2025, according to the Balance of Payments data released by the Central Bank of Nigeria (CBN), marking a 14.41 percent decline from $36.85 billion recorded in 2024.

The decline highlights a key contradiction in the country’s oil sector performance: higher production did not translate into stronger export earnings. Although crude oil output rose to 530.41 million barrels in 2025 from 408.68 million barrels in 2024, Nigeria still fell short of its production targets and frequently missed its Organization of Petroleum Exporting Countries (OPEC) quota. This gap between potential and actual revenue reflects ongoing operational challenges, including disruptions, outages, and inefficiencies across the upstream sector.

Overall hydrocarbon production also underperformed expectations. Nigeria produced 599.64 million barrels of crude oil and condensate in 2025, significantly below its budget target of 766.5 million barrels, leaving a shortfall of 166.86 million barrels. As a result, even with supportive global oil prices during parts of the year, earnings were constrained by volume limitations rather than price weakness alone.

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The weaker crude performance weighed on Nigeria’s external position, as the current account surplus declined to $14.04 billion in 2025 from $19.03 billion in 2024. The CBN attributed this moderation partly to reduced crude oil export proceeds, underscoring oil’s continued dominance in external earnings.

However, the broader oil and gas sector showed signs of gradual diversification. Total exports from crude oil, gas, and refined petroleum products rose to $48.17 billion in 2025, up from $45.51 billion the previous year. This growth was driven largely by stronger gas export earnings, which increased by 21.36 percent to $10.51 billion, as well as the emergence of refined petroleum exports.

Refined petroleum exports reached $6.13 billion, reflecting improving domestic refining capacity, particularly linked to the operations of the Dangote Refinery, which is beginning to reshape Nigeria’s petroleum export structure by introducing value-added products into external trade.

At the same time, Nigeria’s external sector faced rising pressure from imports and capital outflows. Non-oil imports increased by 13.60 percent to $29.24 billion, while payments for services such as transport, travel, and insurance widened the services deficit to $14.58 billion. In addition, net outflows from the primary income account surged by 60.88 percent to $9.09 billion, driven largely by dividend and interest payments to foreign investors.

Despite these pressures, the goods account remained resilient, posting a surplus of $14.51 billion, supported by stronger gas exports and the start of refined petroleum shipments. Meanwhile, fuel imports declined sharply to $10.00 billion from $14.06 billion in 2024, reflecting early gains from domestic refining capacity, although crude imports of $3.74 billion were still recorded for refinery feedstock.

Overall, Nigeria’s balance of payments surplus fell to $4.23 billion in 2025 from $6.83 billion in 2024. Nevertheless, external reserves rose to $45.75 billion, suggesting improved buffer strength even amid structural weaknesses in export efficiency and rising external obligations.

What the data means

The 2025 data shows an economy that is still heavily dependent on crude oil but struggling to convert higher production into higher earnings. Inefficiencies in output delivery, quota shortfalls, and operational disruptions continue to limit revenue growth. At the same time, Nigeria is gradually beginning to diversify its hydrocarbon exports through gas and early-stage refining gains, but these are not yet strong enough to offset crude oil weakness. Rising imports and external financial obligations are further tightening pressure on the external sector, meaning that while reserves have improved, the underlying balance of payments position remains fragile and highly sensitive to oil performance.