Nigeria Forfeits $3.3bn Oil Gains as Joint Morocco $25bn Pipeline Project Advances

Nigeria has forfeited an estimated $3.4 billion in potential oil revenue in 2026, as production shortfalls persist despite a sharp rally in global crude prices and renewed momentum on the $25 billion Nigeria-Morocco Gas Pipeline.

Latest data from the Organization of the Petroleum Exporting Countries shows that Nigeria’s crude output stood at 1.463 million barrels per day (mbpd) in March, well below projections by the Nigerian National Petroleum Company Limited and the Nigerian Upstream Petroleum Regulatory Commission, which had targeted up to 1.8 mbpd.

The production gap has proven costly at a time when oil prices have surged past $100 per barrel, driven by geopolitical tensions in the Middle East.

Brent crude climbed to $101.64 per barrel, while West Texas Intermediate traded at $103.66, following a move by the United States to restrict shipping through the Strait of Hormuz, a critical artery for roughly one-fifth of global oil supply.

Despite this favourable price environment, Nigeria has consistently underperformed. In January, output fell short by 352,000 bpd; in February, by 398,000 bpd; and in March, by 377,000 bpd. Cumulatively, the country failed to produce 33.6 million barrels in the first quarter alone. At prevailing prices, this translates to approximately $3.4 billion in lost revenue.

Production Gaps Cost Billions in Missed Revenue

A picture taken on September 16, 2015 shows workers trying to tie a pipe of the first refinery in Nigeria, which was built in 1965 in oil rich Port Harcourt, Rivers State. [PIUS UTOMI EKPEI/AFP via Getty Images] A picture taken on September 16, 2015 shows workers trying to tie a pipe of the first refinery in Nigeria, which was built in 1965 in oil rich Port Harcourt, Rivers State. [PIUS UTOMI EKPEI/AFP via Getty Images] BI Africa

The missed windfall underscores structural challenges in Nigeria’s oil sector, even as global supply disruptions tighten markets. OPEC reported a steep 7.56 mbpd drop in production in March, largely attributed to constrained flows through the Strait of Hormuz. At the same time, the group revised its global oil demand forecast downward by 500,000 bpd for the second quarter, citing economic fallout from the ongoing conflict.

Amid these headwinds, Nigeria is looking to gas as a strategic hedge. Morocco’s hydrocarbons agency confirmed that an intergovernmental agreement for the Nigeria-Morocco Gas Pipeline will be signed this year, marking a key milestone for the long-delayed project.

Stretching approximately 6,900 kilometres, the pipeline is designed to transport up to 30 billion cubic metres of gas annually from Nigeria to Morocco and onward to Europe. Backed by the Economic Community of West African States, the նախագ has completed feasibility and engineering phases, with first gas projected for 2031.

If realised, the pipeline could significantly enhance regional energy security, strengthen West African economic integration, and position Morocco as a vital energy corridor between Africa and Europe.

For Nigeria, however, the immediate outlook remains mixed. While higher oil prices offer the prospect of increased export earnings and improved foreign exchange inflows, persistent production constraints continue to limit the country’s ability to fully capitalise on favourable market conditions.

Moreover, rising crude prices may translate into higher domestic fuel costs, placing additional pressure on consumers in a deregulated market where pump prices closely track international benchmarks.

As global energy dynamics shift, Nigeria faces a dual challenge: boosting upstream output to capture near-term gains, while accelerating long-term gas infrastructure projects to secure its position in an evolving energy landscape.