Nigeria’s oil sector is off to a troubled start in 2026, with output falling short of both budget and OPEC targets despite favorable oil prices.
Figures released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) show that total liquid hydrocarbon output, including condensate, averaged 1.627 million barrels per day (bpd) in January 2026. That represents a 6.3 percent drop from the 1.737 million bpd recorded in January 2025 and a 5.4 percent decline from the 1.544 million bpd posted in December 2025—back-to-back contractions that will unsettle fiscal planners in Abuja.
The numbers place Nigeria firmly below its 2026 budget production benchmark of 1.84 million bpd, which was set alongside an oil price assumption of $64.85 per barrel and an exchange rate of N1,400 to the dollar. With global crude prices currently hovering around $67 per barrel above the government’s benchmark but retreating from nearly $70 in recent weeks, the price buffer offers limited comfort when volumes remain this depressed.
“Earning more per barrel matters very little if you don’t have the barrels to sell,” one Lagos-based energy analyst noted.
Nigeria’s shortfall also extends to its international obligations. OPEC, in its February 2026 Monthly Oil Market Report, placed Nigeria’s crude output excluding condensate at 1.459 million bpd for January, a five percent year-on-year decline and a figure that falls below the country’s OPEC quota of 1.5 million bpd. The NUPRC separately confirmed that Nigeria currently produces around 196,028 bpd of condensate.
Within the month itself, daily output swung between a low of 1.59 million bpd and a peak of 1.82 million bpd, highlighting the volatility that continues to dog Nigeria’s upstream sector. That peak figure—tantalizingly close to the budget target—suggests the capacity exists but cannot be reliably sustained.
Pipeline vandalism, crude theft, ageing infrastructure, and chronic underinvestment continue to hamper production across the Niger Delta, despite ongoing government efforts to address them. If January’s trend persists, analysts warn the federal government could face early pressure on revenue projections, with knock-on consequences for state allocations and foreign exchange earnings in the months ahead.
WHAT YOU SHOULD KNOW
Nigeria’s oil production is falling when it matters most. In January 2026, output dropped to 1.627 million bpd, missing the government’s budget target, breaching Nigeria’s OPEC quota, and declining both year-on-year and month-on-month.
The painful irony is that oil prices are actually holding above the government’s benchmark, meaning the real problem is not what crude is worth, but how little of it Nigeria is producing.
Until the country confronts the persistent scourges of pipeline vandalism, crude theft, and crumbling infrastructure in the Niger Delta, higher oil prices will continue to offer cold comfort to a nation leaving billions of dollars worth of barrels in the ground.
