Nigeria’s oil sector recorded slower growth in the second quarter of 2025, signalling fresh concerns for the country’s broader economic performance as global crude market uncertainties weigh on Africa’s top producer.
Official data from the National Bureau of Statistics (NBS) revealed the oil sector posted a quarter-on-quarter growth rate of 6.01 per cent in the second quarter of 2025, a notable decline from the 13.81 per cent expansion in Q1 2025.
The figures suggest that while the sector remains in positive territory, the pace of expansion has almost halved, raising questions about output stability, investment inflows and price trends in the months ahead.
The slowdown comes at a time when Nigeria is grappling with production challenges, ranging from pipeline vandalism and crude theft to underinvestment in upstream infrastructure.
The NBS stated: “The real growth of the oil sector was 20.46 (year-on-year) in Q2 2025, indicating an increase of 10.38 percentage points relative to the rate recorded in the corresponding quarter of 2024 (10.08 per cent).
“Growth increased by 18.59 percentage points when compared to Q1 2025, which was 1.87 per cent. On a quarter-on-quarter basis, the oil sector recorded a growth rate of 6.01 per cent in Q2 2025.
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“The Oil sector contributed 4.05 percent to the total real GDP in Q2 2025, up from the figure recorded in the corresponding period of 2024 at 3.51 percent. and up from the preceding quarter, where it contributed 3.97 percent.”
Analysts say the weaker growth rate reflects the fragility of the recovery in oil output despite efforts by the government to ramp up production capacity and improve security around key oil assets.
Oil remains a critical driver of Nigeria’s economy, accounting for the largest share of foreign exchange earnings and government revenues. The sector’s performance is closely watched as it directly influences the country’s fiscal balance and its ability to meet development commitments.
“The nation in the second quarter of 2025 recorded an average daily oil production of 1.68 million barrels per day (bpd), higher than the daily average production of 1.41 million bpd recorded in the same quarter of 2024 by 0.27 million bpd and higher than the first quarter of 2025 production volume of 1.62 million bpd by 0.06 million bpd,” the NBS stated.
Economic observers note that the Q2 moderation could also be tied to external factors such as fluctuating global oil prices and the Organisation of Petroleum Exporting Countries (OPEC) output management strategies. With oil prices facing pressure from weakening global demand and rising supplies from non-OPEC producers, Nigeria’s revenue outlook remains vulnerable.
Despite the quarter-on-quarter slowdown, analysts argue that maintaining positive growth in the oil sector is still a positive signal. They emphasise, however, that for Nigeria to fully harness its hydrocarbon potential, it must address structural bottlenecks, attract new investments, and fast-track reforms in its energy sector.
