Citigroup has warned that Brent crude prices could decline to between $60 and $65 per barrel by the end of the year, a development that could increase pressure on Nigeria’s oil-dependent public finances if the forecast materialises.
The outlook, published by Citi commodities analysts led by Francesco Martoccia, reflects expectations that crude prices will remain under pressure as geopolitical risks ease and global oil supply improves. According to the bank, the resumption of more normal shipping through the Strait of Hormuz following the recent de-escalation of tensions in the Middle East has reduced the geopolitical risk premium that had supported oil prices.
“We continue to recommend selling into any summer rallies,” the Citi analysts said, maintaining a cautious outlook for the global oil market.
Brent crude has retreated significantly from the highs reached during the recent Middle East conflict and was trading around $72 per barrel after concerns over supply disruptions eased. Citi believes prices could soften further as additional supply enters the market and demand growth moderates.
For Nigeria, a sustained decline in oil prices could weigh on government revenues, given the country’s continued reliance on crude exports for foreign exchange earnings and fiscal receipts. Although the Federal Government’s 2026 budget is based on a benchmark oil price close to Citi’s lower forecast range, any prolonged fall below that level or weaker-than-expected oil production could widen fiscal pressures.
Nigeria has also faced persistent challenges in meeting its crude oil production targets due to factors including pipeline vandalism, oil theft, ageing infrastructure and years of underinvestment. These constraints have limited the country’s ability to fully benefit from periods of higher international oil prices.
Citi’s outlook reflects a broader shift among major investment banks, with several institutions recently lowering their oil price forecasts as expectations of stronger global supply and softer demand growth weigh on the market. The growing consensus suggests oil prices may remain lower than previously anticipated after the sharp volatility triggered by geopolitical tensions.
The prospect of weaker crude prices reinforces the importance of broadening Nigeria’s non-oil revenue base, improving oil sector efficiency and accelerating economic diversification. While reforms aimed at boosting tax collection and attracting investment are underway, crude oil remains central to the country’s external earnings and government finances.
Should Brent crude move towards Citi’s projected range in the coming months, Nigerian policymakers may face increased pressure to balance spending priorities, strengthen revenue mobilisation and manage borrowing requirements while maintaining fiscal stability.
