Oil price decline slows talks for $5 bln oil-backed loan to Nigeria from Saudi Aramco, sources say

Oil price decline slows talks for $5 bln oil-backed loan to Nigeria from Saudi Aramco, sources say

The ongoing decline in global oil prices has significantly impacted discussions regarding a $5 billion oil-backed loan from Saudi Aramco to Nigeria. Sources indicate that the financial conditions have become less favorable, complicating the negotiations between the two nations.

The Dangote Refinery, Africa’s largest and one of the world’s most significant crude processing facilities, has been a key factor in Nigeria's increased imports of U.S. WTI crude. The refinery, owned by Aliko Dangote, has an installed capacity of 650,000 barrels per day and has been purchasing a significant portion of its crude from the United States [1]. This shift is attributed to strategic and operational factors, including the refinery's growing appetite for WTI crude and the increasing availability of American crude due to reduced demand in the Asian market [1].

Meanwhile, Saudi Aramco, the world's largest oil company, reported a 12.39% decrease in net profits for 2024, amounting to $106.25 billion compared to $121.25 billion in the previous year. This decline was primarily due to a drop in oil prices and a reduction in production volumes [2]. The company has also faced increased operating costs and a more restrictive production strategy initiated by OPEC+ [2].

The financial conditions have made it challenging for Nigeria to secure the $5 billion oil-backed loan from Saudi Aramco. The loan was initially proposed to support Nigeria's oil and gas sector and infrastructure development. However, the current economic climate, characterized by volatile oil prices and reduced profitability for major oil companies, has slowed the negotiations [3].

Analysts suggest that the global oil market's uncertainties, including production policies led by OPEC+ and the unpredictable fluctuations of oil prices, have contributed to the slowdown in talks. The ongoing negotiations between the United States and China have also influenced global oil prices, with crude oil settling up $1 per barrel in the final trading session of the week, marking its first weekly gain in three weeks [3].

The implications of the delayed loan discussions extend beyond Nigeria and Saudi Aramco. Other oil giants, such as Shell and TotalEnergies, have also experienced profit drops due to the global production surplus and uncertain demand [2]. The financial instability in the oil sector may impact the broader global economy, particularly in regions heavily reliant on oil revenues.

In conclusion, the decline in global oil prices has slowed talks for the $5 billion oil-backed loan to Nigeria from Saudi Aramco. The current financial conditions and the broader implications for the global oil market highlight the need for a balanced approach to oil production and pricing policies.

References:
[1] https://nairametrics.com/2025/06/07/dangote-refinery-boosts-u-s-economy-oil-posts-first-weekly-gains-since-mid-may/
[2] https://energynews.pro/en/aramco-announces-a-12-39-decrease-in-profits-in-2024/