Nigerian crude output hits six-year high on security
Nigeria's oil production has surged to its highest level since 2020 after a crackdown on pipeline theft generated a $6.5 billion budget windfall, though the gains face risks from falling global prices.
Nigeria’s combined crude oil and condensate production averaged 1.74 million barrels per day in June, marking the highest output in six years. Strict crude production alone reached 1.56 million bpd, a 74-month high that pushes the country 4% above its 1.5 million bpd quota from the Organisation of Petroleum Exporting Countries.
The rebound stems directly from a sharp reduction in pipeline vandalism and crude theft in the Niger Delta. The Nigerian Upstream Petroleum Regulatory Commission attributed four consecutive months of growth to the absence of major pipeline outages and improved evacuation efficiency. At the asset level, Bonny Terminal drove much of the recent gain, averaging 318,280 bpd, up from 293,880 bpd in May, while Forcados Terminal followed with 306,360 bpd.
Securing this infrastructure has translated into significant fiscal gains. Oil accounts for over 70% of government revenue, and prices have traded well above the $64.85 per barrel budget benchmark, touching $120 at one point amid Middle East tensions. Between February and May, gross oil revenue reached an estimated $17.78 billion, yielding a $6.51 billion excess over budgeted income.
The production recovery is expected to bolster Nigeria's foreign exchange reserves, which the 2026 Macroeconomic Outlook projects will reach $51.04 billion. Aminu Gwadabe, president of the Association of Bureaux De Change Operators of Nigeria, said increased oil production means a bigger petrodollar windfall for the country, noting that increased FX inflows will support economic growth.
However, the fiscal boost remains vulnerable to external geopolitical shifts. Muda Yusuf, chief executive of the Centre for the Promotion of Private Enterprise, warned that a de-escalation in Middle East conflicts would erase the price windfall. "The revenue will drop, and of course it means that there are some benefits and some demerits," Yusuf said.
The government's security contract with Tantita Security Services Nigeria Ltd appears to be delivering tangible results. According to the Armed Conflict Location and Event Data project, violent events in the South-South region fell 20.9% between 2023 and 2025, with fatalities down 8.3%. Peak daily output in June hit 1.89 million bpd, suggesting a return to 2 million bpd is feasible if the stability holds.
