Nigeria’s 2026 budget outlook may face fresh pressure as global oil prices continue to decline following recent developments involving Venezuela and the United States.

On Tuesday, Brent crude fell 0.38% to $60.56 per barrel, while U.S. West Texas Intermediate dropped 1.17% to $56.46 per barrel. The dip followed President Donald Trump’s announcement that the U.S. had secured a deal to import up to $2 billion worth of Venezuelan crude, with between 30 million and 50 million barrels expected within two months.

Nigeria’s proposed ₦58.18 trillion 2026 budget is benchmarked at $64.85 per barrel, sparking concerns among analysts that a prolonged price slump could weaken government revenue projections.

Adding to market anxiety, U.S. Energy Secretary Chris Wright reiterated Washington’s plan to exert long-term control over Venezuela’s oil industry, including oversight of crude sales and revenues. Under the proposed framework, the U.S. would sell Venezuelan crude directly on the global market—potentially worsening the current supply glut.

Oil and gas consultant Mayowa Sodipo warned that deeper U.S. involvement in Venezuelan oil could hurt Nigeria, noting that the U.S. has historically been one of Nigeria’s key crude buyers.

“Our forex may suffer if the price decline continues,” Sodipo said, warning of reduced foreign exchange inflows, pressure on external reserves, and renewed strain on the naira. He added that sustained low prices could also affect funding for government projects.

Echoing this view, former CIBN chairman Prof. Segun Ajibola said the current price level already places Nigeria’s projections under stress.
“If a price war emerges due to increased Venezuelan supply, Nigeria’s 2026 projections will be affected,” he said.

However, economist and CPPE CEO Dr. Muda Yusuf downplayed fears of an immediate impact, arguing that Venezuela’s current output—less than 1% of global supply—is too small to significantly influence prices in the short term.

“Years of sanctions, underinvestment and institutional collapse have left Venezuela’s production extremely low,” Yusuf said, adding that recent political developments did not damage oil infrastructure.

While noting Venezuela’s long-term importance due to its massive reserves—about 18% of global proven oil reserves—Yusuf stressed that any meaningful production recovery would take time and require major investment and reforms.

Meanwhile, OPEC+ maintained steady output at its January 4 meeting, reinforcing expectations that 2026 may be marked by oversupply. With inventories stable and alternative supply available, markets have so far remained relatively calm.

Still, analysts caution that geopolitical risks remain unpredictable, warning that escalating tensions could quickly shift market sentiment.

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