Global oil prices experienced a significant decline on Tuesday, dropping to approximately $70 per barrel, a level not seen since October 2024.
Brent crude fell by 1.2 percent to $70.76 per barrel, while US West Texas Intermediate (WTI) crude decreased by 0.86 percent to $67.77 as of 06:04 am.
This downturn in oil prices follows a decision by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to increase oil output beginning in April. This marked the first such decision since 2022 and reflects mounting pressure from U.S. President Donald Trump urging OPEC and Saudi Arabia to lower oil prices.
OPEC+ stated that the increase in output would be contingent upon market conditions, emphasizing that “this gradual increase may be paused or reversed subject to market conditions.” The oil cartel indicated that the initial rise would be approximately 138,000 barrels per day (bpd).
Since 2022, OPEC+ has been implementing production cuts totaling 5.85 million bpd, equivalent to about 5.7 percent of global supply, in an effort to stabilize the market. As of the close of business on Monday, Brent crude’s price had slightly decreased to $71.42 per barrel from $72.81.
The reduction in oil prices could pose serious challenges for countries like Nigeria, which recently achieved its OPEC production quota of 1.5 million bpd for the first time since it was established in 2023. The country’s 2025 budget, signed into law by President Bola Tinubu, is based on an oil benchmark price of $75 per barrel.
Analysts are concerned that a sustained drop in global oil prices could limit Nigeria’s ability to effectively execute its budget, as a decline in oil revenues may occur.
