Though there are serious concerns about the future of the global oil market after the United States captured the president of Venezuela, Nicolás Maduro, industry analysts say it will not distort projected revenue generation from oil exports as captured in Nigeria’s 2026 budget.
The federal government has projected about N60.97 trillion in oil revenue for the 2026 fiscal year, lower than the earnings anticipated in the 2025 budget, reflecting more conservative assumptions on crude oil prices and production.
The projection is based on an analysis and the calculation of data contained in the 2026 Appropriation Bill presented to the Nationals Assembly by President Bola Tinubu on Friday.
The 2026 revenue estimate is anchored in a benchmark crude oil price of $64.85 per barrel, daily production of 1.84 million barrels, and an average exchange rate of N1,400 to the dollar.
Speaking with our correspondent on possible global market supply disruption, an economist and chief executive officer (CEO) of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, argued that the capture of Nicolás Maduro by the United States government is unlikely to have any significant impact on the global oil market, particularly in the near term.
This is largely because Venezuela’s current oil output is extremely low—accounting for less than one percent of global oil production.
Yusuf, pointed out that years of underinvestment, operational inefficiencies, sanctions, and institutional collapse have severely weakened the country’s oil sector.
“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.
“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 are therefore resilient enough to absorb any marginal shocks from Venezuela.
That said, Venezuela remains strategically significant in the longer term. The country holds one of the largest proven oil reserves in the world—about 18 percent of global reserves. “ he said.
The CPPE chief said this resource base 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.
He said, “However, such a turnaround would occur only in the medium to long term. Rebuilding production capacity would require significant capital investment, technical expertise, regulatory clarity, and time.
“Any supply boost from Venezuela, therefore, would not be immediate and should not be factored into short-term oil market expectations.”
He opined that while Venezuela’s political developments are geopolitically notable, they do not pose a short-term risk to global oil supply or prices,, adding “Any meaningful impact would depend on long-term political stability and sustained reinvestment in the country’s oil industry.”
Also, the Petroleum Products Retail Outlets Owners Association of Nigeria expressed confidence that the N58.18 trillion Nigeria 2026 Budget, premised on a daily crude oil production projection of 1.84 million barrels per day and an official oil price benchmark of $64.85 per barrel, is realistic and achievable.
The national president of the association, Billy Gillis-Harry, described the 2026 Budget as a strategic and forward-looking framework capable of repositioning and strengthening the nation’s oil and gas sector for sustainable growth, improved operational efficiency, and enhanced energy security.
Gillis-Harry stated that targeted investments in upstream oil and gas operations wiould boost crude oil production through field rehabilitation, renewed exploration activities, and sustained support for marginal and deep offshore fields, ultimately improving national output and increasing government revenue.
“PETROAN expressed strong optimism that the crude oil production target contained in the 2026 Budget is attainable, provided there is improved security for oil and gas assets and a strengthened sense of ownership, inclusion, and participation by host communities, as clearly stipulated under the Petroleum Industry Act.
The association emphasised that effective host community engagement is critical to protecting infrastructure, reducing production losses, and ensuring lasting stability in oil-producing regions.
“Gillis-Harry further underscored the need for adequate funding of key regulatory institutions, particularly the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, noting that strong and well-resourced regulators are essential for effective implementation of the PIA, enhanced transparency, and restored investor confidence across the oil and gas value chain,” the statement added.
On the other hand experts noted that long-term Venezuelan outages would therefore likely lift oil prices, especially diesel.
This is because Venezuela’s heavy-sour crude oil grades are highly suitable for producing diesel which is a key input into virtually every industry.
Recently, the International Energy Agency (IEA) warned that middle distillate markets—including diesel—are already tight.
Accordingly, if Venezuela production is removed from the market, then diesel prices could shift higher, which is likely to increase global inflation.
Indeed, if US policymakers undertake military intervention in Venezuela, then they should both anticipate higher inflation via diesel markets and prepare for a post-intervention environment wherein Venezuela’s oil production takes time, and requires support, to fully rebound.
SOURCE: LEADERSHIP NEWS PAPER
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