Experts warn of potential risk of Venezuela’s oil woes to Nigeria’s budget

Stakeholders in the Nigeria’s economy have spelt out how the recent capture of Venezuela President Nicolás Maduro and the planned control of oil sales by the United States of America will affect the economy of Nigeria. The U.S. military operation on January 3, 2026 that resulted in Venezuelan President Nicolás Maduro being taken into U.S. […]

Stakeholders in the Nigeria’s economy have spelt out how the recent capture of Venezuela President Nicolás Maduro and the planned control of oil sales by the United States of America will affect the economy of Nigeria.

The U.S. military operation on January 3, 2026 that resulted in Venezuelan President Nicolás Maduro being taken into U.S. custody and facing charges in New York is a major geopolitical event with deep legal, diplomatic, and energy implications. 

Besides, it drew strong condemnation from global actors, including criticism at the United Nations, and highlights the U.S. interest in exerting influence over Venezuela’s vast oil reserves, the largest proven in the world. 

U.S. officials have indicated intentions to control and market large volumes of Venezuelan crude—reportedly 30 – 50 million barrels at market prices—and have signalled engagement with American oil firms to invest in Venezuela’s under-performing energy sector.  

Professor Wunmi Iledare, a petroleum economist, told Daily Trust that Nigeria  must move away from volume-driven thinking to value-driven oil strategy.

According to him, it is no longer about how many barrels the country produces but how much net value it retains.

Iledare, who is also the Chairman, Oil, Gas and Energy Policy (OGEP) Forum, Abuja, suggested that Nigeria should consider reducing theft, improving reliability, and protecting infrastructure in order to put the economy in good shape.

Emphasizing the import of local refining, Iledare said every barrel refined at home is one less barrel exposed to global price shocks.

He reasoned that fully integrating Dangote and modular refineries into national energy planning is essential, with a deliberate shift toward exporting refined products within West Africa.

He maintained that gas must become Nigeria’s macroeconomic insurance. 

Expanding domestic gas for power and industry, alongside LNG and regional gas exports, will reduce over-reliance on crude oil revenues.

He added: “In a world of intense capital competition, policy consistency and regulatory credibility matter. Investors will only commit capital where rules are clear, stable, and enforced without discretion.

“US engagement in Venezuela is not Nigeria’s biggest problem. Nigeria’s vulnerability is. Nigeria cannot control global oil politics, but we can control how exposed and prepared we are.”

Nigeria’s challenge, he maintained is not Venezuela’s recovery or America’s strategy.

He added: “It is whether Nigeria chooses foresight over complacency—whether it builds buffers, deepens value creation, and hedges exposure—or remains vulnerable to decisions made far beyond its borders.”

Kunle Odusola-Stevenson Public Relations Expert & Energy Commentator, told Daily Trust that the crisis would have effect on the country’s economy since Nigeria relies heavily on oil revenue for its budget and foreign exchange earnings. 

He said any expectation of increased future Venezuelan supply or global oversupply expectations can cap global oil prices.

He added: “Even modest downward pressure on Brent crude can translate into significant revenue shortfalls for Nigeria’s 2026 budget, slowing fiscal space for public spending and development projects.”

He said Nigerian crude grades compete with other heavy and medium crudes in global markets. 

He explained that an increase in Venezuelan exports could intensify competition for market share in Asia, Europe, and the Americas, potentially reducing Nigeria’s export volumes or forcing discounts to maintain sales.

He said policy and investment signals Geopolitical shocks emphasise the importance of policy certainty, sovereign risk management, and regulatory stability in attracting investment. 

Nigeria’s upstream, midstream, and downstream sectors, he added, must strengthen these fundamentals to retain investor confidence amid shifting global dynamics.

He also harped on the need for Nigeria to accelerate its long-term diversification efforts by boosting upstream production and recovery, expanding domestic refining, growing gas utilisation for power and exports as well as developing non-oil sectors such as agriculture and manufacturing

He explained that such diversification helps buffer the economy against price shocks arising from events beyond Nigeria’s control.

He added: “The U.S. capture of Maduro and the stated pursuit of Venezuelan oil control is a significant geopolitical milestone but will not instantly flood the market with crude.

“Global oil markets are likely to experience short-term volatility, yet the medium-term impact depends on whether Venezuelan production recovers meaningfully, which requires time and capital.

“For Nigeria, reliance on oil revenues makes the country vulnerable to price shifts caused by global developments, reinforcing the urgency of policy stability, production growth, refining capacity, and economic diversification to protect earnings and budget sustainability in a complex geopolitical environment.”