Geopolitical tensions involving Venezuela and the likelihood of a major shift in global oil supply dynamics may place downward pressure on crude oil prices, raising concerns over the sustainability of the Federal Government’s proposed N58.18 trillion 2026 budget. Analysts warn that renewed oil output from Venezuela could significantly disrupt market balance and undermine Nigeria’s key fiscal assumptions.
The development has intensified scrutiny of Nigeria’s oil price benchmark, with projections increasingly suggesting a decline in crude prices. While the Federal Government expects to generate about $40.6 billion from the production of 673 million barrels of crude oil in 2026—estimated at 1.84 million barrels per day and priced at $64.85 per barrel—the National Assembly has proposed reducing the benchmark to $60. Some analysts have projected a possible drop to $50 per barrel, a scenario that could result in revenue losses of about $10.24 billion.
Concerns heightened following comments by U.S. President Donald Trump after the reported capture of Venezuelan leader Nicolás Maduro, indicating plans to ramp up oil production in the country. Although eight major oil producers, including Saudi Arabia and Russia, have reaffirmed commitment to OPEC-backed market stability, stakeholders caution that increased supply could weaken oil prices.
The warning comes amid Nigeria’s fiscal strain, with the government recording a revenue shortfall of about N30 trillion in 2025. The 2026 budget projects N15.52 trillion for debt servicing, N15.25 trillion for recurrent expenditure and N26.08 trillion for capital spending.