₦airaland Forum

The April market rout, which crashed oil prices into the low $60s per barrel, is creating additional fiscal challenges to petrostates and oil-producing countries heavily dependent on oil revenues, on top of any tariff-related hardships.

As Brent Crude prices sank to $63 per barrel, major producers in the Gulf region, as well as Brazil and Nigeria, are looking to contain the fallout from the price plunge. Russia’s central bank has already signaled that the oil price decline could hit its economy hard.

Oil at $60 is about $20 to $30 per barrel lower than what many major oil exporters in the Gulf need to balance their budgets. For Saudi Arabia, the world’s top crude oil exporter, its budget breakeven price is $91 per barrel, as estimated by the International Monetary Fund (IMF).

With prices much lower than the breakeven price, Saudi Arabia may have to accelerate government borrowing and slow or delay spending on its ambitious futuristic megalomaniac projects.

Another major Gulf oil producer, Kuwait, last month approved a financing and liquidity law that will allow OPEC’s fourth-largest producer to return to the debt market after eight years.

Kuwait’s economy remains in recession due to OPEC+ production cuts, the International Monetary Fund (IMF) said in December 2024, adding that the economy is “highly exposed” to commodity price volatility and a global growth slowdown.

The price crash of the past week isn’t helping at all.

“The oil price drop we’ve seen over the last week has taken us into territory where for a lot of oil-dependent economies, it’s not going to be what they need to balance their budgets, nowhere close,” Richard Bronze, head of geopolitics at Energy Aspects, told Reuters this week.

For Russia, the oil market meltdown in recent days could pose risks to the economy, Russia’s Central Bank Governor Elvira Nabiullina said earlier this week.

[b]“If the escalation of the tariff wars continues, this usually leads to a decline in global trade and the global economy and, possibly, demand for our energy resources. Therefore, there are risks here,” Nabiullina was quoted as saying by Russia’s TASS news agency.[/b]

malali:
Source: https://oilprice.com/Latest-Energy-News/World-News/Oil-Nations-Scramble-to-Avert-Economic-Crisis-After-Prices-Crash.html

Sirianese:
Those fools in Abuja won't be able to prop up the Naira for much longer

Nigerians prepare for an exchange rate of N2,500 to one dollar, petrol at N2,000 per litre or higher

malali:
Tinubu’s grandstanding infrastructure obsession has all the markings of another debt-fueled disaster in the making. With oil crashing into the low $60s per barrel ( far below Nigeria’s budget breakeven) the only logical question is: who funds his dreams? His answer appears dangerously obvious ,more loans, higher interests, and a financial dependence on creditors who will eventually dictate Nigeria’s policies.

What Tinubu is building are not assets that generate future revenue or foreign exchange, they are legacy projects for ribbon-cutting ceremonies. Railways that cannot pay for themselves, roads without tolling strategy, power projects without market reforms. This is not visionary economics , it’s political optics borrowed at premium rates.

Nigeria is staring down a future of ballooning debt servicing costs, currency devaluation pressures, and even more taxes squeezed from an already battered population. Without structural reforms, productivity expansion, or genuine export capacity,

Tinubu’s current path feels like a fast-track to fiscal captivity.

malali:
Tinubu’s grandstanding infrastructure obsession has all the markings of another debt-fueled disaster in the making. With oil crashing into the low $60s per barrel ( far below Nigeria’s budget breakeven) the only logical question is: who funds his dreams? His answer appears dangerously obvious ,more loans, higher interests, and a financial dependence on creditors who will eventually dictate Nigeria’s policies.

What Tinubu is building are not assets that generate future revenue or foreign exchange, they are legacy projects for ribbon-cutting ceremonies. Railways that cannot pay for themselves, roads without tolling strategy, power projects without market reforms. This is not visionary economics , it’s political optics borrowed at premium rates.

Nigeria is staring down a future of ballooning debt servicing costs, currency devaluation pressures, and even more taxes squeezed from an already battered population. Without structural reforms, productivity expansion, or genuine export capacity,

Tinubu’s current path feels like a fast-track to fiscal captivity.

Atarakpa:
Is simple let them stop dredging for a while and create scarcity the price will jump up to double. But greed and lack of trust will not allow them

malali:
Tinubu’s grandstanding infrastructure obsession has all the markings of another debt-fueled disaster in the making. With oil crashing into the low $60s per barrel ( far below Nigeria’s budget breakeven) the only logical question is: who funds his dreams? His answer appears dangerously obvious ,more loans, higher interests, and a financial dependence on creditors who will eventually dictate Nigeria’s policies.

What Tinubu is building are not assets that generate future revenue or foreign exchange, they are legacy projects for ribbon-cutting ceremonies. Railways that cannot pay for themselves, roads without tolling strategy, power projects without market reforms. This is not visionary economics , it’s political optics borrowed at premium rates.

Nigeria is staring down a future of ballooning debt servicing costs, currency devaluation pressures, and even more taxes squeezed from an already battered population. Without structural reforms, productivity expansion, or genuine export capacity,

Tinubu’s current path feels like a fast-track to fiscal captivity.

InvertedHammer:
/
They are not being strategic. It was a double jeopardy.
OPEC decided to ramp up production which drove down oil price. Less than a week later, the tariffs war started which really nailed the coffin. With the noted risk aversion and flight to safety (gold, jpy), oil prices dived with other risky assets. But recovery is in the horizon once Trump stops talking or tweeting crazy ideas.

/

ebexofficial:
Let the price of fuel crash too in reflection

crownfierce:
Rubbish, u posted here. A man that has fought tooth and nail to ensure there is tax reform so we can maximise other revenue potentials. It’s obvious you don’t know Tinubu.. u re just playing opposition blindly

InvertedHammer:
/
They are not being strategic. It was a double jeopardy.
OPEC decided to ramp up production which drove down oil price. Less than a week later, the tariffs war started which really nailed the coffin. With the noted risk aversion and flight to safety (gold, jpy), oil prices dived with other risky assets. But recovery is in the horizon once Trump stops talking or tweeting crazy ideas.

/

Atarakpa:
Is simple let them stop dredging for a while and create scarcity the price will jump up to double. But greed and lack of trust will not allow them

crownfierce:
Rubbish, u posted here. A man that has fought tooth and nail to ensure there is tax reform so we can maximise other revenue potentials. It’s obvious you don’t know Tinubu.. u re just playing opposition blindly

ebexofficial:
Let the price of fuel crash too in reflection

malali:

They have been doing that for 2 years, where have you been ? OPEC has been cutting quotas worldwide. This crash is lack of demand. China is not buying as much as before,If they stop "dredging" they wont be able to pay salaries and there is no guarantee oil prices will come back up anytime soon.