…the government’s effective share of the gross export value is likely to fall within 45% to 60%, translating to between approximately $6.6 billion and $8.8 billion (about N9.1 trillion to N12.1 trillion).
By Olusola Bello
Nigeria exported crude oil worth an estimated $14.66 billion (N20.22 trillion) during the first five months of 2026 as higher global oil prices offset lower export volumes, highlighting both the country’s continued dependence on petroleum revenues and the limits of equating export earnings with government income.
Analysis of production and export data from the Central Bank of Nigeria (CBN) shows that Nigeria exported approximately 148.9 million barrels of crude between January and May 2026, representing about 69% of total production of 216.85 million barrels during the period.
Although export volumes declined by about 3.3% compared with the same period in 2025, stronger international oil prices pushed the gross market value of exports up by almost 30%, from $11.32 billion a year earlier.
Gross Export Value Is Not Government Revenue
According to the data from the Central Bank of Nigeria( CBN) , While the headline export figure illustrates the scale of Nigeria’s oil trade, industry experts caution that the $14.66 billion does not represent money earned by the Federal Government.
Nigeria’s crude oil industry operates under a combination of Joint Venture (JV) agreements, Production Sharing Contracts (PSCs), marginal field licences, and independently operated assets.
Under these arrangements, export proceeds are shared among NNPC Limited, international oil companies, indigenous producers and contractors after accounting for production costs, royalties, petroleum taxes, profit-sharing mechanisms, and other fiscal obligations.
Based on Nigeria’s current production mix, analysts estimate that the government’s effective share of the gross export value is likely to fall within 45% to 60%, suggesting that the Federal Government’s direct and indirect earnings from crude exports during the five months could range between approximately $6.6 billion and $8.8 billion (about N9.1 trillion to N12.1 trillion).
The remaining value accrues to oil companies, cost recovery under PSC arrangements, operating expenses, and other commercial obligations.
Higher Prices Offset Lower Volumes
The improvement in export earnings was driven almost entirely by rising crude prices rather than higher production.
Average international crude prices climbed sharply from $68.05 per barrel in January and $72.33 in February to $106.09 in March, $126.71 in April, and $112.63 in May as geopolitical tensions in the Middle East disrupted global oil markets.
The price rally followed the escalation of hostilities involving the United States, Israel and Iran, with concerns over shipping through the Strait of Hormuz adding a significant geopolitical premium to oil markets.
The stronger prices more than compensated for Nigeria’s lower export volumes.
Production Continues to Recover
Nigeria produced approximately 216.85 million barrels of crude oil between January and May.
Monthly production increased steadily after a weak February, rising from 45.26 million barrels in January to 47.43 million barrels in May.
Average daily production improved from 1.46 million barrels per day in January to 1.53 million barrels per day in May, reflecting gradual recovery following government efforts to curb crude theft and pipeline vandalism.
Exports also strengthened during the period, increasing from 31.31 million barrels in January to 33.48 million barrels in May.
Domestic Refineries Receive Less Than Export Market
Despite rising production, most Nigerian crude continued to be exported.
Only about 67.95 million barrels, representing roughly 31% of total production, remained available for domestic refining, inventory and operational requirements.
Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) showed that domestic crude deliveries to refineries reached 15.84 million barrels in May, while total refinery intake stood at 17.92 million barrels.
Industry stakeholders say local refineries continue to face challenges securing adequate crude supplies despite the Domestic Crude Supply Obligation (DCSO) established under the Petroleum Industry Act.
The issue has become increasingly contentious following allegations by Dangote Petroleum Refinery that domestic crude allocations have been insufficient to support optimal refinery operations—claims the Federal Government has denied.
The Crude Oil Refinery Owners Association of Nigeria (CORAN) says many modular refineries continue to source crude directly from private producers rather than through government allocation mechanisms.
CORAN Publicity Secretary Eche Idoko said most modular refinery operators rely on commercial supply agreements with independent upstream companies.
He called on authorities to strengthen implementation of the Domestic Crude Supply Obligation to ensure Nigerian refineries receive adequate feedstock before excess crude is exported.
Investors Watching Balance Between Exports and Domestic Refining
For investors, the latest figures underscore Nigeria’s balancing act between maximizing foreign exchange earnings from crude exports and supplying enough feedstock to support its growing domestic refining industry.
Higher crude prices have boosted export values and strengthened external reserves, but sustained shortages of domestic crude could slow refinery utilisation, reduce value addition and prolong dependence on imported petroleum products.
Energy analysts say Nigeria’s long-term objective should be to optimise both export earnings and domestic refining capacity, allowing the country to capture greater value across the petroleum supply chain rather than relying primarily on crude exports.
While the first five months of 2026 delivered a substantial export windfall, the bigger challenge remains converting higher oil prices into sustainable government revenues, stronger refining capacity and broader economic growth.