Global oil prices fell to their lowest level in more than four years on Tuesday, as persistent concerns about oversupply combined with growing optimism over a possible peace deal between Russia and Ukraine.
Brent crude, the international benchmark, dropped 2.86 per cent to $58.83 a barrel by 10.30 pm WAT. US West Texas Intermediate (WTI) fell 2.88 per cent to $55.04 a barrel, pushing crude prices below the $60 mark for the first time since February 2021.
According to Reuters, the decline reflects mounting fears of excess supply in the global market, alongside expectations that sanctions on Russia could be eased if progress is made towards ending the war in Ukraine.
Analysts at Barclays said they expect Brent crude to average $65 a barrel in 2026, “slightly ahead of the forward curve due to the expected 1.9 million barrels per day surplus they see as being priced in already”.
The price slump comes as the Organisation of Petroleum Exporting Countries (OPEC) maintains supply discipline among its members.
On November 30, OPEC retained Nigeria’s crude oil production quota at 1.5 million barrels per day (bpd) through December 2026.
The cartel also said eight participating countries — Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman — agreed to pause planned production increases in January, February and March 2026, citing seasonal demand patterns.
In a separate update on December 12, OPEC said Nigeria’s crude oil output rose to 1.43 million bpd in November, the highest level in three months, though still below the country’s allocated quota.
The sharp fall in oil prices adds pressure to oil-exporting economies, including Nigeria, which relies heavily on crude sales for government revenue and foreign exchange earnings.
Earlier this year, Nigeria’s senate approved a downward revision of the 2026 oil benchmark price to $60 per barrel, from an earlier projection of $64.85, reflecting weaker price expectations in the global market.
Analysts warn that a prolonged period of lower oil prices could strain public finances and complicate budget planning if production levels and prices fail to recover.