By Radarr Africa

Copyright radarr

Nigeria’s crude oil export earnings dropped sharply by N3.18 trillion in the first half of 2025 despite a rise in production levels, new data from the National Bureau of Statistics (NBS) has shown.

According to the latest foreign trade report, crude oil exports between January and June 2025 were valued at N24.92 trillion, down from N28.10 trillion in the same period of 2024. This represents an 11.3 per cent decline in value year-on-year, even though the Nigerian Upstream Petroleum Regulatory Commission reported a 12.7 per cent increase in output during the period.

A closer look at the trade figures revealed that crude oil exports in the first quarter of 2025 stood at N12.96 trillion, compared with N15.49 trillion in Q1 2024. This marks a fall of N2.53 trillion, or 16.3 per cent. By the second quarter of 2025, the decline was smaller, with crude exports dropping from N12.61 trillion in Q2 2024 to N11.97 trillion in Q2 2025 — a reduction of N642 billion, or 5.1 per cent.

The share of crude oil in Nigeria’s overall exports has also weakened. In Q1 2024, crude accounted for 80.8 per cent of exports, but this dropped to 62.9 per cent in Q1 2025 — a fall of nearly 18 percentage points. The same trend continued in Q2, when crude made up just 52.6 per cent of exports compared to 71.2 per cent in Q2 2024, a decline of 18.6 percentage points.

In contrast, non-crude oil exports recorded remarkable growth. In the first half of 2025, non-crude exports more than doubled to N18.43 trillion, compared with N8.79 trillion in the first half of 2024. This represents an increase of 109.6 per cent, or N9.64 trillion. Within this, non-oil exports rose from N3.74 trillion to N6.21 trillion, a gain of N2.47 trillion, or 66 per cent.

The surge in non-oil exports boosted Nigeria’s overall trade performance. Total exports rose to N43.35 trillion in H1 2025, up from N36.89 trillion in H1 2024, reflecting a 17.5 per cent increase. Imports, on the other hand, grew at a slower pace of 6.9 per cent, climbing from N28.72 trillion to N30.71 trillion. This helped to improve Nigeria’s trade balance significantly, from N8.17 trillion in H1 2024 to N12.64 trillion in H1 2025 — a growth of 54.6 per cent.

However, analysts say the figures underline a paradox: Nigeria, Africa’s largest oil producer, is pumping more crude but earning less from it. This suggests that weaker global oil prices, rising domestic utilisation, or a mix of both, may be affecting export revenues.

Earlier in March 2025, reports indicated that Nigeria’s 2025 budget could face pressure as international crude oil prices fell below the government’s benchmark of $75 per barrel. At the time, falling prices, alongside reduced daily output, raised concerns about the government’s ability to fund planned projects.

The situation is further complicated by rising domestic demand. The Nigerian National Petroleum Company Limited (NNPCL) has been supplying crude to the Dangote Petroleum Refinery under a naira-for-crude arrangement. While the deal supports local refining and reduces fuel import costs, it may also be diverting volumes away from the international market, thereby affecting foreign exchange earnings.

In June 2025, reports showed that the Federal Government sold crude oil worth N219.38 billion to the Dangote Refinery in the first four months of the year. During the same period, the government suspended the supply of domestic crude to Dangote and other local refiners for one month, earning just $1.59 million from crude exports in April. These figures were contained in internal documents submitted by NNPCL at Federation Account Allocation Committee (FAAC) meetings.

The developments point to the changing dynamics of Nigeria’s oil sector. While oil remains the single largest contributor to exports, its dominance is weakening. Crude oil’s share of exports fell from 76.2 per cent in H1 2024 to 57.5 per cent in H1 2025. This shift highlights the gradual rise of non-oil and non-crude exports as key drivers of Nigeria’s external trade.

Experts say the trend offers both opportunities and risks. On one hand, a growing non-oil export base makes Nigeria less vulnerable to global oil price shocks. On the other, weaker crude oil earnings could undermine government revenue, since oil remains central to budget financing and foreign reserves.

As the country adjusts to these shifts, questions remain over how Nigeria will balance its domestic crude supply commitments with the need to maintain robust international export earnings. With total crude oil production estimated at 266.9 million barrels in the first half of 2025, the challenge will be to ensure that higher output translates into stronger fiscal stability and foreign exchange inflows.