Nigeria and Iraq are the two most vulnerable members of OPEC that are badly affected by Coronavirus crisis which has badly impacted the price of crude oil and analysts fear that the two countries, which solely depend on oil to grow their economies, are at the brink of collapse.

According to analysts at Rystad Energy, the global upheaval which has resulted in oil price crash, upending the current fragile balance of power because key oil-producing countries, including Iraq and Nigeria, can’t buy their way out of this crisis with near-zero-interest loans like the Saudis and Americans can.

They said even with Brent at $25 (indeed, even when it fell below $20), the Saudis were throwing around cash at all kinds of investments, including COVID-sinking cruise lines. The American shale patch can bail itself out if it wishes to, even amid desperate talk of looming bankruptcies.

But in Nigeria, where oil is about 9percent of GDP and 90 percent of exports, and with a break-even price of around $57 a barrel and also a fiscal break-even of around $100, the economy is in serious trouble.

If the economy is in trouble, Rystad Energy analysts said, the government is in even bigger trouble as roughly 20 million people are unemployed, and that is now expected to climb another 25 percent. It’s enough to bring down a government, with the only lifeline now a $3.4-billion IMF emergency loan just approved. But making matters worse is the fact that no one even wants to touch Nigerian oil right now because there isn’t enough demand for it–even at $10 a barrel. And it’s competing with overproduced U.S. crude (light and low in sulfur).

Already the Federal Government on Tuesday revealed plans to cut the oil price benchmark for the current budget to $20 per barrel. The development would make it the second time the government is slashing the oil benchmark for the 2020 budget.

The sharp fall in the price of crude oil had earlier forced the government to slash the benchmark from $57 per barrel to $30.

Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed Federal Government’s intention to further slash the benchmark on Tuesday.

Ahmed who spoke during a web conference which focused on the impact of low oil prices on Nigeria’s economy, said: “We are in the process of an amendment that is bringing down the revenue indicator to $20 per barrel,”.

The decline in revenue following the sharp fall in the price of crude oil is already taking a toll on Nigeria’s economy and Ahmed had in March disclosed that the N10.59tn budget would be slashed by 15 per cent.

The minister, at the web conference, also said Nigeria’s oil and gas projects would be delivered later than originally planned as a result of upstream budget cuts.

The Federal Government is planning to cut oil production to 1.7 million barrels per day from the 2.1 million barrels per day proposed in the 2020 budget.

The planned production cut is to be made in line with an agreement reached by the Organisation of Petroleum Exporting Countries and its allies better known as OPEC+.

In Iraq, the fragility will translate into a boon for the Islamic State first and foremost, while Iran and the United States grapple for control in this proxy war setting.

https://businessday.ng/energy/oilandgas/article/analysts-fear-nigeria-iraq-are-at-brink-of-collapse/

It will collapse on buharis skinny skull for failing to regulate the petroleum global market like he promised zombies in 2014.

For Nigeria, the collapse is inevitable. The union forged in 1960 was a disaster from day one.

Gandollar:
It will collapse on Buhari's skinny skull for failing to regulate the petroleum global market like he promised zombies in 2014.

Smh. Why would you put the whole blame on Buhari?
What were our past leaders doing since the inception of independence in 1960 that they haven't fixed another means in our economy?

Agreed, Buhari might be dull but that doesn't justify you exonerating others with his gullibility.

Every past Nigerian leader are guilty of this fall.

The same analyst will repeat himself in ten years.

aremuforlife:
The same analyst will repeat himself in ten years.

Yes, only that by that time, it will be the Nigeria made up of North and west that might collapse again. Biafra would have left before then.

Diversify d economy they won't.....fuel prices has crashed.....still baffles me how FG sells pms to us at 108

The analysts are predicting from what they can see, but life can take a turn in a blink..

But few things are sure, the world including you and I have learnt new habits in the cause of the pandemic and lockdown.. crude oil would be in less use even when things are assumed back to normal..

FirstbornWds:


Smh. Why would you put the whole blame on Buhari?
What were our past leaders doing since the inception of independence in 1960 that they haven't fixed another means in our economy?

Agreed, Buhari might be dull but that doesn't justify you exonerating others with his gullibility.

Every past Nigerian leader are guilty of this fall.

Buhari promised during 2014 campaigns to regulate the global oil prices and market and you believed it was possible, what wrong have I done calling a spade a spade?

The black gold, d single unifying treasury that has glued and promoted d one Nigerian mantra is now a curse onto itself. Imagine if Nigeria govt overtime was able to refine crude in Nigeria and with d non export/ very low price of crude, d masses would have benefited from a very low purchasing price at our filling stations now. The system has never allowed local refining possible and with d gloom and snub at our only export (d writer said it's over 90% ) a break or collapse of d central govt is appearing inevitable . The correction against d mistake of 1914 cud be staring us in d face.

Buhari, the illiterate cow, should stabilise the global oil price as he promised to do naw.

Nigeria, a cuntry, where old wrinkle illiterates rule the so-called literate people. Chai e!

Chikelue2000:
Diversify d economy they won't.....fuel prices has crashed.....still baffles me how FG sells pms to us at 108

We have diversified. We are prospecting for oil in the arid northern Nigeria.

Peterobi90:
The analysts are predicting from what they can see, but life can take a turn in a blink..

But few things are sure, the world including you and I have learnt new habits in the cause of the pandemic and lockdown.. crude oil would be in less use even when things are assumed back to normal..

Please expatiate on your last paragraph.

Gandollar:
We have diversified. We are prospecting for oil in the arid northern Nigeria.

guess that's d new definition of diversification....

Gandollar:
We have diversified. We are prospecting for oil in the arid northern Nigeria.

That's a sick joke.

at least we can now enjoy the diversifying being done by the buhari administration since 5yrs.

we will sell our high quality rice to the Americans.








for me I think Nigeria can collapse. it has already serve it purpose for the greedy British

Gandollar:
It will collapse on buharis skinny skull for failing to regulate the petroleum global market like he promised zombies in 2014.

Haha Bubu that year.

Lostz:
at least we can now enjoy the diversifying being done by the buhari administration since 5yrs.

we will sell our high quality rice to the Americans.








for me I think Nigeria can collapse. it has already serve it purpose for the greedy British

@British, we will compel them to buy our rice as punishment for their atrocities.

oil cannot collapse Nigeria economy. Lagos State is very rich, she will use her VAT to pull Nigeria out. Niger Deltans will know that Lagos is Baba.

SLAP44:




That's a sick joke.

It's actually sci-fi fiction with buhari as lead act

Gandollar:
Please expatiate on your last paragraph.

We are practicing a new way of life:

It takes 21 days to stop a habit, habits mean jobs, jobs mean patronage, patronage means movement, movement means fuel, fuel means crude-oil..

while majority could not do a lot of things during the lockdown, some have decided to not bother going back to them anymore..

E.g I personally learnt to cut my hair during the lockdown, which normally would have taken me 5km every week to visit my barber..

Any one who is observant knows this fact. Govt is trying merge MDAs already as a subtle form of sack.

SLAP44:
For Nigeria, the collapse is inevitable. The union forged in 1960 was a disaster from day one.

It will also collapse on your head and the head of your family, clan and tribe.

The union was forged and forced by your fathers and grandfathers, because they felt they will automatically get power to rule the whole country.
And after failing to grab power by democratic means, they attempted (and actually succeeded for 6 months) to take the forceful (military) route. After also failing to rule the whole of Nigeria by military route, they decided to split the baby they created in the first place.

BeardedMeat:
@British, we will compel them to buy our rice as punishment for their atrocities.

what will you know eat now that buhari has stopped importation of rice?


or we give British our high quality rice then import low quality foreign rice for consumption?

For 64 years Nigeria sold oil, there were many years of the oil boom, when a barrel was sold for at least 100 dollars a barrel and at most 160 dollars a barrel.

Why did Nigerian Non-leaders not save for a rainy day? Why did they not invest in a Sovereign Trust Fund that would accrue interest for Nigerians? They used the glory years of the oil boom to loot Nigeria into the dark ages and under-developed every sector in Nigeria.

Now that the sh!t is hitting the fan, it is the middle class, working class and people bellow the working class that will suffer. The Non-leaders have stockpiled monies enough for their generations yet unborn.

Vote wisely next time Nigerians, use your votes wisely, do not sell your votes for a bag of rice/5000 naira/free buffet food and drink on election day.

FirstbornWds:


Smh. Why would you put the whole blame on Buhari?
What were our past leaders doing since the inception of independence in 1960 that they haven't fixed another means in our economy?

Agreed, Buhari might be dull but that doesn't justify you exonerating others with his gullibility.

Every past Nigerian leader are guilty of this fall.

Please wake up and smell the coffee.

Cc lzaa itooworwor

imhotep:

Please wake up and smell the coffee.

Cc lzaa itooworwor

Coffee smells unfresh

Peterobi90:


We are practicing a new way of life:

It takes 21 days to stop a habit, habits mean jobs, habits means patronage, patronage means movement, movement means fuel, fuel means crude-oil..

while majority could not do a lot of things during the lockdown, some have decided to not bother going back to them anymore..

E.g I personally learnt to cut my hair during the lockdown, which normally would have taken me 5km every week to visit my barber..

Oh I see
You are right anyway. It has thought m more lessons on financial management.

wirinet:

It will also collapse on your head and the head of your family, clan and tribe.

The union was forged and forced by your fathers and grandfathers, because they felt they will automatically get power to rule the whole country.
And after failing to grab power by democratic means, they attempted (and actually succeeded for 6 months) to take the forceful (military) route. After also failing to rule the whole of Nigeria by military route, they decided to split the baby they created in the first place.

You don't need to cry yet, I am not the cause of your poverty.

Nigerias case is worsened by the glaring fact we have the lowest quality of leadership at this trying time

TheAfricaQueen:
For 64 years Nigeria sold oil, there were many years of the oil boom, when a barrel was sold for at least 100 dollars a barrel and at most 160 dollars a barrel.

Why did Nigerian Non-leaders not save for a rainy day? Why did they not invest in a Sovereign Trust Fund that would accrue interest for Nigerians? They used the glory years of the oil boom to loot Nigeria into the dark ages and under-developed every sector in Nigeria.

Now that the sh!t is hitting the fan, it is the middle class, working class and people bellow the working class that will suffer. The Non-leaders have stockpiled monies enough for their generations yet unborn.

Vote wisely next time Nigerians, use your votes wisely, do not sell your votes for a bag of rice/5000 naira/free buffet food and drink on election day.

How can we vote right when we are looking for the most uneducated, unambitious, bigoted and vindictive dinosaur that will come to punish a particular people , even if it will drag the country 50 years backwards.

We will just girdle up