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Nigeria’s revenue from oil export hit an estimated $26 billion between January and July this year as the price of global oil benchmark, Brent crude, rose to the highest level in two weeks on Wednesday.
According to the new OPEC Revenues Fact Sheet recently released by the Energy Information Administration (EIA), revenue from oil export rose by 30 percent to $34 billion in 2017 from $26 billion in 2016.
The oil price appreciation followed a sharp drop in the United States crude inventories and the country’s sanctions on Iran, the third-largest producer in the Organisation of the Petroleum Exporting Countries (OPEC), causing tighter supply of the commodity.
The price of Brent crude, against which Nigeria’s oil is priced, rose by $1.38 to $74.19 per barrel, the highest since August 8, while US West Texas Intermediate (WTI) gained $1.28 to $67.12 per barrel.
Nigerian economy was battered due to the fall in the prices of crude oil in the international market in 2014, at the end of 2017, a development which led the country into its worst economy crisis since 1987 in 2016.
However, the country officially emerged from recession in Q3 2017 after two consecutive positive GDP growth. The economy shock occasioned by the drop in crude price prompted the Federal Government to devise other means to diversify the economy away from oil into solid minerals, agriculture, among others to forestall a recurrence of the 2016 economic distress.
But while the Mining and Quarry sector of the economy grew by 14.85 percent (year-on-year) in Q1 2018, 30.25 percentage points and 4.14 percentage points higher than the same quarter of 2017 and Q4 2017, the agriculture sector grew by 3.00 percent (year-on-year) in real terms in the review quarter, a decrease by 0.38 percentage points from the corresponding period of 2017 also a decrease by 1.23 percentage points from the preceding quarter.
Currently, Nigeria still rely on crude oil as its major source of revenue, accounting for about 70 percent of its total revenue and over 90 percent for its export earnings.
The Brent crude price rose to $66.87 per barrel from around $53 per barrel at the beginning of the year.
In May 2018, Brent rose above $80 per barrel for the first time since November 2014 but dropped afterward amid rising US crude inventories.