Nigeria Risks 60% Oil Revenue Collapse From 2030, New Report Warns

Nigeria could lose more than 60 per cent of its oil revenue from 2030 as global crude demand weakens, a report by the E3G think tank has warned. The study, published by The Guardian UK on Tuesday, says the projected fall threatens fiscal and economic stability in Africa's most populous country.

The decline is tied to the global shift away from crude oil toward renewable energy and electric vehicles. Global oil demand is expected to plateau over the coming decade, with a peak likely in the early 2030s, forcing producers to compete for a shrinking pool of buyers. Nigeria is listed among the countries most exposed because of its heavy reliance on oil income and limited economic diversification.

Algeria Worse Hit, Gulf Producers Hold Ground

The report projects Algeria could suffer an 87 per cent decline in oil revenue, steeper than Nigeria's projected drop of more than 60 per cent from 2030. Cheapest producers with large reserves and better infrastructure, such as Saudi Arabia and the United Arab Emirates, are expected to hold their position as demand weakens. Higher-cost and less diversified producers face severe losses.

Oil revenue accounts for more than 40 per cent of government income in 17 countries globally, the report found. In Iraq and Libya, that figure runs between 70 and 90 per cent.

The researchers warn that lost oil income could leave affected countries unable to fund basic public services or service their debts, creating fiscal crises with wider security consequences.

Governments Not Prepared, Co-Author Says

Beth Walker, a co-author of the report, said governments were not adequately preparing for what is coming.

"Governments are not thinking about and not prepared for these outcomes. The transition becomes riskier for everyone when oil producers are left to adjust on their own and oil markets are left to manage themselves. Producer fragility becomes a global security risk," Walker said.

She said the problems would not arrive as a single global crisis but as a run of national fiscal crises that could turn into unrest, migration and security problems. She singled out Nigeria as a particular concern, citing its population and influence across Africa.

"Most of these problems are on a much larger scale than Venezuela, and they could all unravel just as the UK and Europe's capacity to contain live conflicts is drained," she said.

The report notes the transition is already under way. Renewable energy growth is cutting oil consumption in several countries, and China, long the dominant source of rising global demand, is now seeing consumption trend downward, partly on rapid electric vehicle adoption. India's future demand remains uncertain and could prove pivotal to how fast global demand falls.

Co-author Maria Pastukhova warned against slowing the shift. "None of this is an argument for slowing the transition. A slow but chaotic transition can be just as destabilising as a fast one, maybe even more so," she said.

The E3G study was compiled over two years and included war-gaming of declining oil demand scenarios with more than 100 public servants and experts worldwide. It calls on governments, the International Monetary Fund, the World Bank and private financial institutions to work together to help oil-dependent economies prepare for falling revenues.

What It Means For Nigeria

Oil still drives the bulk of Nigeria's foreign exchange earnings, so a revenue fall of this size would hit the naira and the federal budget at the same time. Unless non-oil exports and domestic revenue expand sharply before 2030, Abuja would face tougher borrowing costs and thinner buffers for public services.