Citi’s $60 Oil Forecast Raises Fresh Concerns Over Nigeria’s 2026 Budget

July 3 () — A forecast by Citigroup that Brent crude could fall to $60 per barrel by the end of 2026 has heightened concerns over Nigeria’s fiscal outlook and the sustainability of its budget assumptions.

The projection comes as global oil prices retreat following the easing of geopolitical tensions in the Middle East. Brent crude, which peaked at about $115 per barrel in May, is now trading around $72.

A further decline in oil prices would threaten Nigeria’s revenue projections, widen the fiscal deficit and increase the country’s reliance on borrowing to fund its N23.85 trillion budget gap.

Nigeria’s 2026 budget is based on a benchmark oil price of $64.85 per barrel and an output target of 1.84 million barrels per day. However, analysts note that the country has consistently struggled to meet its production targets, leaving public finances vulnerable to any sustained drop in crude prices.

Lower oil earnings could also weaken foreign exchange inflows and limit the country’s ability to build external reserves, especially as geopolitical risk premiums that previously supported prices continue to fade.

In a research note, Citi strategists led by Francesco Martoccia said oil market fundamentals were reasserting themselves following the restoration of normal shipping through the Strait of Hormuz.

According to the bank, shipping flows have normalised, Chinese demand remains weak, physical crude markets have softened and global inventories have not tightened as expected, pointing to a more bearish outlook for prices.

Other global investment banks share similar views. Goldman Sachs said the oil market could return to a supply surplus following the reopening of the Hormuz shipping route, while Morgan Stanley also lowered its oil price outlook amid expectations of excess supply.

Citi expects Brent crude to trade between $60 and $65 per barrel by year-end, a scenario that could intensify pressure on Nigeria’s fiscal position unless supported by stronger oil production or alternative revenue sources.