Page 12 - Nigeriaone mag 3 edition en

Nigeria's crude oil exports

Oil well, illustrative image

As the continent's leading oil exporter, Nigeria plays a pivotal role in global energy markets. There are
substantial gas and oil reserves in the country. Exports of petroleum products have been a major source of
foreign exchange. Nigeria exported crude oil worth over four trillion Nigerian Naira (roughly 9.6 billion US
dollars) between October and December 2021. Nigeria's main trading partners for crude oil are Europe and
Asia. Exports of crude oil to Europe were approximately two trillion Nigerian Naira (NGN) in the fourth quarter
of 2021. Exports to Asia, on the other hand, were approximately 1.4 trillion NGN. In general, except for Europe
and Asia, crude oil exports plunged sharply during the said time frame. Overall, oil exports in Nigeria decreased
to 1270799.94 MGN million in December from 1511558.58 NGN million in November 2021. Crude oil exports
represent Nigeria's primary way of earning foreign exchange. Just like other areas of the national economy, the
energy sector was severely impacted by the Covid-19 pandemic.
Taking a glance at the contribution of Nigeria's oil sector to the GDP between the first quarter of 2018 and the
third quarter of 2021 is noteworthy. The oil sector in Nigeria generally contributed about 9% to the country's
gross domestic product (GDP) before the global health crisis. The oil industry contributed 5.9% of the real GDP
between October and December 2020, down roughly 3% from the previous quarter. In the third quarter, the oil
sector’s contribution to the GDP reached 7.5%. Mineral fuels, oils, and distillation products generated more
than 80% of Nigeria's export value in 2019, amounting to approximately 4.7 billion dollars. The reduction in
demand associated with the Covid-19 pandemic, however, put a damper on oil production and exports. In 2020,
the export value derived from oil declined dramatically. At the beginning of 2020, Nigeria, one of the world's
largest oil producers, produced more than 2 million barrels per day. In January 2021, the Covid-19 pandemic
triggered a decline in its production to 1.14 million barrels per day. It was the lowest production in recent years.
During the first three months of 2021, daily oil production was at its lowest. Recently estimated volumes have
fallen to less than 1.3 million barrels per day by 2022, which is alarming. This situation further highlights
missed revenue opportunities.

Nigeria 12