Nigeria’s crude petroleum sector grows 16.4%, exits contraction despite lower production

Nigeria’s crude petroleum sector grows 16.4%, exits contraction despite lower production

Nigeria’s crude petroleum sector grew by about 16.37% year‑on‑year in real terms in the first quarter of 2026, according to the National Bureau of Statistics’ latest GDP report. This marks a clear exit from the near‑stagnation and contraction pattern of recent years, and crude oil recorded the strongest growth rate among all mining and quarrying sub‑activities in the quarter, ahead of “Quarrying & Other Minerals” at 14.55%.

The rebound in crude‑sector GDP came even as physical output remained constrained. NBS and accompanying commentary note that average daily oil production slipped to around 1.55 million barrels per day in Q1 2026, down from roughly 1.62 mbpd in Q1 2025 and about 1.58 mbpd in Q4 2025, with OPEC maintaining Nigeria’s formal quota at close to 1.5 mbpd. In other words, the sector’s real growth reflects a combination of a low base, somewhat better operational performance than in prior troughs, and more favourable oil‑price dynamics rather than a major volume surge.

At the broader oil‑sector level (crude plus other oil activities), real growth came in at 2.57% year‑on‑year in Q1 2026, up from 1.87% in the same quarter of 2025 but sharply weaker than the 6.79% posted in Q4 2025. The sector’s contribution to total real GDP was 3.92%, slightly below the 3.97% share recorded in Q1 2025 but above the 2.87% contribution in Q4 2025. That profile underlines a reality that matters for fiscal and external‑balance debates: oil is recovering, but it is still a relatively small share of measured GDP, even as it remains central for FX and government revenue.

For policymakers and investors, the key question is whether this improvement is durable. OPEC’s quota ceiling, persistent security and operational challenges, and under‑investment in upstream capacity all limit how far Nigeria can push volumes in the short term. If global oil prices soften, the crude‑sector growth we see in Q1 2026 could fade quickly, exposing how much of the current recovery is driven by price and base effects rather than a structural fix to production bottlenecks.

NUMBER TO WATCH: 16.37% – real year‑on‑year growth in crude petroleum activity in Q1 2026, the highest growth rate within the mining and quarrying sub‑sectors.

RISK TO WATCH: Average daily crude production slipped to roughly 1.55 mbpd in Q1 2026, below the 1.62 mbpd recorded a year earlier and still close to Nigeria’s 1.5 mbpd OPEC ceiling; without a credible path to higher, more stable volumes, oil‑sector GDP will remain vulnerable to price swings rather than anchored in production gains.