Oil prices fell sharply on Wednesday, amid concerns over a potential recession and a cut in production by OPEC and Russia. This is having a negative impact on Nigeria, which relies on oil exports for revenue.
Brent crude futures were down $2.02, or 2.22%, to $88.90 a barrel at 1228 GMT, while U.S. West Texas Intermediate crude (WTI) fell $2.10, or 2.35%, to $87.13 per barrel.
The fall in oil prices comes as the global economy is slowing down, due to a number of factors, including the ongoing war in Ukraine, high inflation, and rising interest rates. This is leading to concerns that demand for oil will fall in the coming months.
OPEC and Russia, which together control around 40% of global oil production, agreed last week to cut production by 100,000 barrels per day in September. This is the first such cut in production since the start of the pandemic.
The cut in production is designed to support oil prices, but it is also likely to add to inflationary pressures around the world.
Nigeria is one of the countries that is being hardest hit by the fall in oil prices. The country relies on oil exports for around 90% of its foreign exchange earnings.
The fall in oil prices is also having a negative impact on the Nigerian economy, which is already struggling with high inflation and a weak currency.
The Nigerian government has said that it is prepared to take steps to mitigate the impact of the fall in oil prices. However, it is unclear what these steps will be.
The fall in oil prices is a reminder of the vulnerability of the Nigerian economy to fluctuations in the global oil market. The government needs to take steps to diversify the economy and reduce its reliance on oil exports.
