Nigeria’s planned $5 billion oil-backed loan deal with Saudi Aramco has been put on hold due to a sharp decline in global oil prices, Reuters has reported, citing sources familiar with the negotiations.
The deal, which was expected to inject critical liquidity into Nigeria’s struggling economy, is now under review as both parties reassess the financial terms and risks amid the downturn in crude markets.
It was originally intended to leverage Nigeria’s oil reserves to fund infrastructure projects and support economic recovery, the agreement faces uncertainty as oil prices continue to slide. Brent crude has dropped nearly 20% from above $82 per barrel in January to around $66.76 — well below Nigeria’s 2025 budget benchmark of $75.
The fall in prices has made the financial projections underpinning the loan less attractive, prompting caution from both sides. Negotiations are ongoing, with officials from Nigeria and Saudi Aramco exploring ways to revise the terms in line with current market realities.
Compounding the challenge is Nigeria’s declining oil production. According to OPEC data, the country produced 1.486 million barrels per day in April — significantly below the 2025 budget target of 2.06 million barrels and far off its peak of nearly 3 million barrels per day in 2005.
The delay comes as Nigeria continues to battle inflation, currency volatility, and fiscal shortfalls. The government had hoped the loan would play a key role in stabilizing the economy and funding major development projects.
Despite the setback, there remains cautious optimism that a restructured deal can be finalized, providing Nigeria with a much-needed financial boost to navigate its current economic challenges.
