Economists and energy experts in Nigeria are warning that renewed volatility in global oil markets, triggered by a US-led operation in Venezuela, could pose serious risks to the country’s proposed 2026 budget. The concerns come amid fears that the return of Venezuelan crude to international markets could push oil prices to historic lows, undermining revenue projections for oil-dependent economies such as Nigeria.
Analysts note that Nigeria’s 2026 budget is based on a relatively conservative oil price benchmark of $60-$64 per barrel. However, energy professionals caution that a global supply glut – driven by increased output from Venezuela – could depress prices well below those assumptions.
Speaking in the video, Ahmad Dancida, Head of Operations at Energy Culture Limited, explains that an oversupplied market would have immediate consequences for Nigeria’s public finances. He notes that a decline in oil prices would directly affect government spending, given that Nigeria’s social and fiscal planning is closely tied to crude prices. Dancida also highlights potential knock-on effects on global shipping patterns, as new export flows from Venezuela and the United States to other regions of the world emerge.
Nigeria has proposed a 2026 budget of approximately $54.46 billion, with a projected deficit of around $20.13 billion, largely to be financed through borrowing. The government has set an ambitious production target of 1.84 million barrels per day, although analysts featured in the report note that oil theft and sabotage in the Niger Delta have kept actual output significantly lower.
These developments follow a recent US military operation in Venezuela, adding a new layer of geopolitical uncertainty to already fragile global energy markets.
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