Nigeria’s talks with Saudi Aramco for a $5 billion oil-backed loan have stalled due to falling global crude prices and lender concerns over Nigeria’s supply capacity. The deal, set to be Nigeria’s largest of its kind and Aramco’s first in the country, faces delays as banks grow cautious amid market uncertainty.
Nigeria’s proposed $5 billion oil-backed loan with Saudi Aramco, the country’s largest to date, faces delays due to falling oil prices and lender concerns. Initiated by President Tinubu in November 2023, the deal follows Nigeria’s strategy of using future oil earnings for upfront funding. However, declining prices mean more crude is needed to repay the loan, raising risks for lenders. Nigeria’s oil output is already constrained by underinvestment, theft, and existing loan commitments using over 300,000 bpd.
Limited supply and obligations to joint-venture partners further complicate the deal, with Oando expected to handle the cargo offtake.In April 2024, Nigeria received the final $1.05 billion tranche of a $3.3 billion oil-backed loan from Afreximbank to boost the economy and dollar liquidity. The loan will be repaid with 90,000 barrels of crude per day, priced at $65 per barrel
