Global oil prices slid to their lowest level in more than four years, weighed down by persistent concerns over oversupply and cautious optimism over a potential peace deal between Russia and Ukraine.
Brent crude, the international benchmark, fell 2.86 percent to US$58.83 a barrel by 10:30 pm WAT, while US West Texas Intermediate (WTI) dropped 2.88 percent to US$55.04 a barrel. The fall pushed crude below the $60 mark for the first time since February 2021, underscoring volatility in the global oil market.
Market analysts said the decline reflected growing fears of excess supply alongside expectations that sanctions on Russia could be eased if progress is made toward ending the conflict in Ukraine.
“Oil markets are factoring in a potential relaxation of Russian sanctions, which would increase supply, even as OPEC seeks to maintain discipline among its members,” Barclays analysts said. They forecast Brent crude to average $65 a barrel in 2026, slightly above the forward curve, citing a projected surplus of 1.9 million barrels per day already priced into the market.
The price slump comes amid continued restraint by the Organisation of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+. On November 30, the cartel kept Nigeria’s crude oil production quota at 1.5 million barrels per day (bpd) through December 2026. It also said eight participating countries Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman had agreed to pause planned production increases in January, February, and March 2026, citing seasonal demand patterns.
In a separate update on December 12, OPEC reported that Nigeria’s crude output had risen to 1.43 million bpd in November, the highest level in three months, although still below its allocated quota.
The decline in prices adds pressure on oil-dependent economies, particularly in Africa, where crude exports are a key source of government revenue and foreign exchange earnings. Nigeria, Africa’s largest oil producer, relies heavily on crude sales to finance its budget.
Earlier this year, the Nigerian Senate approved a downward revision of the 2026 oil benchmark price to $60 per barrel, from an earlier projection of $64.85, reflecting weaker expectations for global oil prices. The move is aimed at ensuring the federal budget remains realistic amid market uncertainties.
The recent price slump is also expected to have broader economic implications. Lower crude revenues could constrain government spending on infrastructure and social programmes in oil-dependent nations, while potentially reducing inflationary pressures for importers of petroleum products.
Global oil markets have remained sensitive to geopolitical developments in recent years. The Russia-Ukraine conflict, ongoing negotiations over sanctions, and shifting production strategies by OPEC+ have contributed to heightened volatility. Analysts warn that even small changes in global supply or demand projections can trigger sharp swings in crude prices.
Investors will also be watching the outcome of upcoming OPEC+ meetings, where the group may decide whether to adjust quotas or extend supply curbs. Market participants note that any decision to increase production could further depress prices, while continued restraint could help stabilize the market.
Despite the current downturn, some analysts remain cautiously optimistic about medium-term oil prices. “Even with near-term oversupply, global demand growth is expected to support prices above $60 per barrel in the next year,” said a senior market strategist.
The latest slide in oil prices underscores the delicate balance in global energy markets, where geopolitical tensions, production policies, and economic forecasts interact to shape the cost of crude for producers and consumers worldwide.
