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Oil prices fall on Venezuela crisis

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Experts disagree on how it ‘ll affect budget
Nigeria’s 2026 budget may be threatened following the US strike on Venezuela at the weekend.

This is as a result of the ripple effect the action is having on the price of crude in the international market.

Yesterday, oil prices continued their decline with Brent dropping by 0.38 per cent to $60.56 a barrel. The United States(US) West Texas Intermediate (WTI) crude fell by 1.17 per cent to $56.46 a barrel as the market reacted to President Donald Trump’s announcement that the US had secured a deal to import up to $2 billion in Venezuelan crude.

Also, Trump said Venezuela will turn over between 30 million and 50 million barrels of oil to the US in two months.

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With Nigeria’s 2026 federal budget of N58.18 trillion predicated on a “conservative” crude oil benchmark of $64.85 per barrel, experts reckon that should the decline continue, the revenue earnings of the country may be affected.

On Wednesday, US Energy Secretary Chris Wright further accentuated Trump’s plans for Venezuela’s oil, affirming that the plans to take long-term control of Venezuela’s oil industry, including overseeing crude sales and revenues, “indefinitely.”

Under the plan, Washington would sell Venezuelan oil directly on global markets, thus adding to the current glut being experienced in the global supply and delivery position.

Mayowa Sodipo, an oil and gas consultant, said continued involvement of America in Venezuelan oil will negatively affect Nigeria’s revenue projection for this year because the US has always been the world’s largest buyer of the country’s oil.

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‘’The gains being recorded by the local currency, the Naira, may also be in jeopardy given that oil remains the largest source of foreign exchange for the country.

Our forex may suffer if the price decline continues; it means reduced Forex inflow for the country, including affecting our external reserves, and this will put more pressure on the naira,” Sodipo said.

He warned that the effect will reverberate in the overall economy as major projects may be impacted negatively. “The government has embarked on huge projects; they may suffer funding should the price continue to decline,” Sodipo added.

This view was reechoed by former chairman of the Chartered Institute of Bankers of Nigeria (CIBN), Prof. Segun Ajibola, who warned that as one of Nigeria’s top oil buyers, any reduction in U.S. demand could have knock-on effects for export volumes and prices.

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Ajibola said: “At the current price of about $60.8 per barrel compared with Tinubu’s proposed $64.85, the situation is already becoming stressed. If a price war ensues, as could be triggered by increased supply from Venezuela, it will affect Nigeria’s projections for 2026.”

On the contrary, an economist and Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, opined that the situation in Venezuela was unlikely to have any significant impact on the global oil market, particularly in the near term.

He based his argument on the present glut being experienced in the oil market and the insignificant contribution of Venezuela to the market.

Yusuf said: “Venezuela’s current oil output is extremely low, accounting for less than one per cent of global oil production. Years of underinvestment, operational inefficiencies, sanctions, and institutional collapse have severely weakened the country’s oil sector.

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’As a result, Venezuela no longer plays a material role in influencing global oil supply dynamics. Importantly, the recent attack and the circumstances surrounding Maduro’s capture did not damage Venezuela’s oil production infrastructure. Consequently, oil output is expected to remain broadly unchanged in the short term.”

Beyond Venezuela’s limited production capacity, he further argued, the global oil market is presently experiencing a supply glut. This supply cushion means that even if Venezuela were to experience some level of production disruption, it would not translate into any meaningful impact on global oil prices. Current market fundamentals, he said, are therefore resilient enough to absorb any marginal shocks from Venezuela.

Yusuf, however, noted that the country remains strategically significant in the longer term as it holds one of the largest proven oil reserves in the world- about 18 per cent of global reserves, a resource base he argued, gives Venezuela substantial latent potential

“If the current political developments do not escalate into prolonged instability, and if Donald Trump follows through on indications that American oil companies could re-enter the Venezuelan oil sector, the country’s oil output could gradually recover,” the economist said.

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He added that such a turnaround would occur only in the medium to long term. Yusuf also noted that rebuilding production capacity would require significant capital investment, technical expertise, regulatory clarity, and time. Therefore, any supply boost from Venezuela would not be immediate and should not be factored into short-term oil market expectations.

“In summary, while Venezuela’s political developments are geopolitically notable, they do not pose a short-term risk to global oil supply or prices. Any meaningful impact would depend on long-term political stability and sustained reinvestment in the country’s oil industry,” Yusuf said.

However, in the medium to long term, the economist argued that there may be a significant increase in output, which may lead to a significant increase in supply and which may affect the global oil price.

“But that is in the medium to long term because for now, Venezuela will be experiencing some instability. Even the investors that Trump was talking about will also be very cautious in returning to Venezuela to produce.

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“So, it will take some time for them to have that level of confidence to go to Venezuela and invest. I mean, it will also take some time, a minimum of a year. These are investors who have left the place for some time. These are investors who also want to watch the political environment and the security environment in the place. So, investors will also take their time before they go there to begin to invest in oil production; these are private investors. These are not government investors.

However, the Organisation of Petroleum Exporting Countries (OPEC+) appears to be girding its loins. At its January 4 meeting, OPEC+ agreed to keep output steady, despite internal tensions, reinforcing expectations that 2026 will be marked by oversupply. With inventories comfortable and alternative barrels available, traders see little reason to panic. On that narrow view, oil’s muted reaction looks rational.

Yet markets are rarely adept at pricing geopolitical risk in real time. President Trump’s threats, not only against Venezuela but also Colombia, Mexico and even Greenland, inject a level of headline risk that is hard to model but difficult to underestimate. History suggests that investors’ instinct to “keep calm and carry on” often holds until it suddenly does not.

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Zulum Pledges More Secure, Prosperous Borno For Successor

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Borno State governor, Prof. Babagana Umara Zulum, has pledged to hand over a more stable, secure, and economically prosperous state to the next administration as he continues efforts to consolidate gains made in governance and security.

Zulum gave the assurance on when he received prominent sons and daughters of Gubio Local Government Area at the Government House, Maiduguri, alongside the APC governorship candidate for 2027, Engr. Mustapha Gubio.

The delegation, led by elder statesman Alhaji Gambo Gubio, included top political figures, retired security officers, and former public office holders from the area.

The governor said despite persistent security challenges in the state, his administration remains committed to strengthening stability and deepening development across all sectors.

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“Security is the most difficult issue. Insha Allah, before I leave, the situation will be better than now. I will hand over a more stable, more prosperous, and more secure government to Engr. Mustapha Gubio, Insha Allah,” Zulum said.

He stressed that sustaining progress is often more difficult than achieving it, urging continued prayers and support for the APC governorship candidate.

“What matters is not just success; managing success is more difficult than achieving success itself,” he said.

Zulum also described Engr. Mustapha Gubio as a long-time associate with strong character and leadership qualities.

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“I have known him for the past 26 years since he was a student at the University of Maiduguri. His integrity is evident; he is humane, very gentle, and composed,” he said.

The governor recalled the difficult early days of his administration in 2019, noting the sacrifices made in addressing insecurity and humanitarian crises in the state.

“When I took over the leadership of the state, in the first 55 days of my administration, I saw my children only three times. The first four years were really challenging,” he said.

He expressed appreciation to the delegation for the visit and reaffirmed his commitment to continued progress in the state.

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Leader of the delegation, Alhaji Gambo Gubio, thanked the governor for his support and described the APC governorship candidate as a worthy successor.

He also commended Zulum’s achievements in security, infrastructure, and governance, saying the governor had made significant progress in stabilising the state.

The visit was attended by top government officials, including the APC State Chairman, Secretary to the State Government, commissioners, and special advisers.

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Senate Calls For Total Ban On Importation Of Textile Materials

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The Senate has asked the Federal Government to impose an outright ban on the importation of foreign textile materials as part of efforts to revive Nigeria’s struggling textile industry and stimulate local cotton production.

The upper chamber also urged the Federal Government, through the Ministries of Agriculture and Trade and Investment, to take urgent steps to resuscitate textile manufacturing across the country, particularly along the Kaduna-Kano industrial corridor, citing its potential to create jobs and address rising youth unemployment and insecurity.

The resolutions followed the adoption of a motion titled ‘urgent need to revive the textile industries in Nigeria with particular reference to the Kaduna-Kano Axis’, sponsored by Senator Sunday Katung (APC, Kaduna South) and co-sponsored by several lawmakers across party and regional lines.

Presenting the motion, Senator Katung recalled that Nigeria’s first large-scale textile manufacturing mill was established in Kaduna in 1957, a development that later spread to other regions and contributed significantly to industrial growth and employment generation.

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According to him, government intervention policies in the 1960s and 1970s, including restrictions on textile imports, encouraged investment in local production and helped the industry flourish.

He noted that by the late 1970s and 1980s, Nigeria had about 167 textile mills employing more than 500,000 workers directly, making the sector the second-largest employer of labour after the Federal Government.

Katung further lamented the sector’s steady decline, attributing it to obsolete equipment, inadequate capital, inconsistent power supply and policy challenges.

The senator expressed concern that more than six decades after the industry’s golden era, Nigeria’s textile sector has deteriorated significantly, leaving once-thriving industrial facilities abandoned and reducing the industry to one of the weakest segments of the nation’s manufacturing sector.

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Lawmakers who supported the motion underpinned the need for deliberate government intervention to restore the industry’s competitiveness, boost local production, reduce dependence on imports and create sustainable employment opportunities for Nigerians.

The Senate subsequently called for increased funding to the Bank of Industry (BoI) to support the revival of textile companies and requested the Federal Ministry of Agriculture to intensify efforts to encourage cotton farming, describing cotton production as critical to the survival of the textile sector.

Following deliberations, the Senate adopted the motion and urged the Federal Government to implement policies aimed at revitalising the textile value chain, from cotton farming to manufacturing and distribution, as part of broader efforts to strengthen the country’s industrial base and economic growth.

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Tinubu launches Ebola response task force, approves N10bn emergency fund

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President Bola Tinubu has approved the establishment of a Presidential Task Force on Ebola Virus Disease Preparedness and Emerging Public Health Threats and authorised the immediate release of N10 billion to strengthen Nigeria’s emergency response capacity against the deadly virus.

The intervention comes amid renewed concerns over the resurgence of Ebola cases in the Democratic Republic of Congo (DRC) and Uganda, prompting the Federal Government to activate measures aimed at preventing the importation of the disease into the country.

The emergency funding is expected to bolster the operational readiness of the Nigeria Centre for Disease Control and Prevention (NCDC) and support critical public health response activities nationwide.

The newly constituted Presidential Task Force will be chaired by the President’s Chief of Staff, Femi Gbajabiamila, with membership drawn from key Ministries, Departments and Agencies (MDAs), alongside representatives of state governments.

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President Tinubu’s approval followed a high-level stakeholders’ meeting convened by Gbajabiamila to assess Nigeria’s preparedness and develop strategies to forestall any outbreak within the country’s borders.

Participants at the meeting included officials of the Ministry of Interior, the Federal Airports Authority of Nigeria (FAAN), the Nigeria Immigration Service (NIS), the Nigerian Civil Aviation Authority (NCAA), the Lagos State Government and other critical institutions involved in disease surveillance and border management.

As part of the emergency measures, the President directed all states hosting international airports and major border corridors to submit detailed preparedness plans, funding requirements and intervention needs for coordinated implementation by the Federal Government.

The Task Force is also expected to immediately intensify passenger screening at international airports through enhanced temperature checks and stricter crowd-control measures.

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Authorities have been directed to strengthen monitoring of travellers arriving through identified high-risk routes, including flights operated by Air Uganda, RwandaAir, Air Tanzania, Air Angola, Kenya Airways and Ethiopian Airlines.

In addition, referral and isolation centres are to be activated without delay at the Lagos and Abuja international airports, while similar facilities will subsequently be established at other designated entry points across the country.

The government further ordered the mandatory deployment of QR code-based pre-arrival health declaration systems for passengers originating from, or transiting through, countries classified as high risk.

Other precautionary measures include the disinfection of departure halls, cargo terminals, baggage handling areas and other airport facilities.
President Tinubu also mandated the advisory group to engage security, diplomatic and aviation authorities on possible regulations governing flights from affected countries.

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The Task Force is expected to recommend the designation of specific airports or terminals for high-risk flights to facilitate controlled screening and isolation procedures, as well as consider adjustments to flight schedules to minimise contact between high-risk travellers and other passengers.

The latest measures signal the administration’s determination to avoid a repeat of past public health emergencies by strengthening early detection systems, tightening border surveillance and ensuring rapid response capacity in the face of emerging disease threats.

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