Chief Executive Officer of Financial Derivatives Company Limited, Bismarck Rewane has warned that structural decay and production bottlenecks may prevent the country from reaping benefits as global crude oil prices surge past the $100-per-barrel threshold.
The sobering analysis was presented during the Nairametrics Money Fair (Wise 1.0) held in Lagos between March 17 and March 18, 2026.
The forum highlighted a growing anxiety that Nigeria is drifting toward stagflation, a toxic combination of stagnant economic growth and high inflation despite the favorable international market.
The primary driver of this paradox is a significant decline in domestic output. Nigeria’s oil production has stagnated at approximately 1.3 million barrels per day, a figure that sits consistently below its OPEC quotas.
This reduced export capacity ensures that the volume of oil available for sale is insufficient to capitalize on the higher price environment.
Compounding this issue is the prevalence of pre-sold crude contracts and forward-sale arrangements. Because much of the country’s future production is already committed to existing swap deals or debt servicing, the immediate liquidity benefits of the price surge are largely bypassed.
The high global prices are also driving up the landing costs of refined fuels, which in turn fuels inflation across the transportation and food sectors, effectively squeezing the Nigerian consumer from both ends.
Analysts at the forum drew chilling parallels between the current volatility and the 1973 oil embargo.
While that historic crisis reshaped global energy markets, experts suggest the contemporary situation is more perilous due to deeper global economic integration. Unlike the localized shocks of the past, the current crisis involves overlapping risks, including geopolitical premiums and a tightening of global liquidity.
Major central banks, including the U.S. Federal Reserve and the Bank of England, are expected to maintain elevated interest rates to combat persistent inflation. This global monetary tightening, combined with soaring gasoline prices in the United States and elsewhere, threatens a prolonged period of global economic cooling that could hit emerging markets like Nigeria particularly hard.
Despite the grim outlook, the panel identified the Dangote Refinery as a critical milestone on the path toward macroeconomic stability. By domesticating refining capacity, the facility offers a potential shield against the external shocks of international fuel pricing and reduces the pressure on foreign exchange reserves.
However, the consensus remains that infrastructure improvements and policy interventions are non-negotiable. Without curbing oil theft in the Niger Delta and addressing the inefficiencies of the upstream sector, Nigeria risks remaining a spectator to its own resource wealth.
As Bismarck Rewane aptly noted during the fair, “The world is entering another period defined by uncertainty where unknown unknowns outweigh predictable risks.”