Nigeria-Aramco $5B Loan Stalls Amid Oil Price Drop

Negotiations for a record $5 billion oil-backed loan between Nigeria and Saudi Aramco have stalled, with falling global oil prices and recent OPEC+ policy shifts making lenders—including Gulf and African banks—increasingly hesitant. Nigeria, already burdened by substantial pre-existing oil-backed debts, must now pledge even more crude to secure the facility, complicating talks amid persistent production shortfalls and challenges like oil theft and underinvestment. President Bola Tinubu initiated the discussions in November 2023 as part of a larger $21.5 billion foreign borrowing plan. The Dangote Refinery has started easing some import pressures, but Nigeria’s crude output remains well below its OPEC quota and what is needed to support such a large loan. These delays underscore growing concerns about Nigeria’s economic stability and energy security as it relies more on forward oil sales for short-term liquidity. The outcome of the negotiations remains uncertain due to market volatility and unresolved supply issues.