General News
Scary! Get Ready for $10 a Barrel Oil
This is a very bad time for oil dependent country like Nigeria because a scary analysis in Bloomberg by Gary Shilling has predicted a further tumble in oil price,
According to Shilling, at about $50 a barrel, crude oil prices are down by more than half from their June 2014 peak of $107.
They may fall more, perhaps even as low as $10 to $20.
Here’s why.
U.S. economic growth has averaged 2.3 percent a year since the recovery started in mid-2009.
That’s about half the rate you might expect in a rebound from the deepest recession since the 1930s.
Meanwhile, growth in China is slowing, is minimal in the euro zone and is negative in Japan.
Throw in the large increase in U.S. vehicle gas mileage and other conservation measures and it’s clear why global oil demand is weak and might even decline.
At the same time, output is climbing, thanks in large part to increased U.S. production from hydraulic fracking and horizontal drilling.
U.S. output rose by 15 percent in the 12 months through November from a year earlier, based on the latest data, while imports declined 4 percent.
Something else figures in the mix: The eroding power of the OPEC cartel. Like all cartels, the Organization of Petroleum Exporting Countries is designed to ensure stable and above- market crude prices. But those high prices encourage cheating, as cartel members exceed their quotas.
For the cartel to function, its leader — in this case, Saudi Arabia — must accommodate the cheaters by cutting its own output to keep prices from falling. But the Saudis have seen their past cutbacks result in market-share losses.
So the Saudis, backed by other Persian Gulf oil producers with sizable financial resources — Kuwait, Qatar and the United Arab Emirates — embarked on a game of chicken with the cheaters.
On Nov. 27, OPEC said that it wouldn’t cut output, sending oil prices off a cliff. The Saudis figure they can withstand low prices for longer than their financially weaker competitors, who will have to cut production first as pumping becomes uneconomical.
What is the price at which major producers chicken out and slash output? Whatever that price is, it is much lower than the $125 a barrel Venezuela needs to support its mismanaged economy. The same goes for Ecuador, Algeria, Nigeria, Iraq, Iran and Angola.
Saudi Arabia requires a price of more than $90 to fund its budget. But it has $726 billion in foreign currency reserves and is betting it can survive for two years with prices of less than $40 a barrel.
Furthermore, the price when producers chicken out isn’t necessarily the average cost of production, which for 80 percent of new U.S. shale oil production this year will be $50 to $69 a barrel, according to Daniel Yergin of energy consultant IHS Cambridge Energy Research Associates.
Instead, the chicken-out point is the marginal cost of production, or the additional costs after the wells are drilled and the pipes are laid. Another way to think of it: It’s the price at which cash flow for an additional barrel falls to zero.
Last month, Wood Mackenzie, an energy research organization, found that of 2,222 oil fields surveyed worldwide, only 1.6 percent would have negative cash flow at $40 a barrel.
That suggests there won’t be a lot of chickening out at $40. Keep in mind that the marginal cost for efficient U.S. shale-oil producers is about $10 to $20 a barrel in the Permian Basin in Texas and about the same for oil produced in the Persian Gulf.
Also consider the conundrum financially troubled countries such as Russia and Venezuela find themselves in: They desperately need the revenue from oil exports to service foreign debts and fund imports. Yet, the lower the price, the more oil they need to produce and export to earn the same number of dollars, the currency used to price and trade oil.
With new discoveries, stability in parts of the Middle East and increasing drilling efficiency, global oil output will no doubt rise in the next several years, adding to pressure on prices. U.S. crude oil production is forecast to rise by 300,000 barrels a day during the next year from 9.1 million now.
Sure, the drilling rig count is falling, but it’s the inefficient rigs that are being idled, not the horizontal rigs that are the backbone of the fracking industry. Consider also Iraq’s recent deal with the Kurds, meaning that another 550,000 barrels a day will enter the market.
While supply climbs, demand is weakening. OPEC forecasts demand for its oil at a 14-year low of 28.2 million barrels a day in 2017, 600,000 less than its forecast a year ago and down from current output of 30.7 million. It also cut its 2015 demand forecast to a 12-year low of 29.12 million barrels.
Meanwhile, the International Energy Agency reduced its 2015 global demand forecast for the fourth time in 12 months by 230,000 barrels a day to 93.3 million and sees supply exceeding demand this year by 400,000 barrels a day.
Although the 40 percent decline in U.S. gasoline prices since April 2014 has led consumers to buy more gas-guzzling SUVs and pick-up trucks, consumers during the past few years have bought the most efficient blend of cars and trucks ever.
At the same time, slowing growth in China and the shift away from energy-intensive manufactured exports and infrastructure to consumer services is depressing oil demand. China accounted for two-thirds of the growth in demand for oil in the past decade.
So look for more big declines in crude oil and related energy prices.
Federal government has secured a fresh $208.3 million financing from the World Bank to strengthen Nigeria’s cash transfer programme targeted at poor and vulnerable households as the country continues to grapple with the economic impact of ongoing reforms.
President Bola Tinubu’
The new facility is expected to bolster the government’s social protection initiative by providing direct cash support to millions of low-income Nigerians affected by rising living costs following the removal of petrol subsidy and the liberalisation of the foreign exchange market.
The funding forms part of the World Bank-backed social safety net programme aimed at cushioning the impact of economic reforms while improving the country’s social protection system.
It is also expected to support efforts to enhance the National Social Register, strengthen payment systems and ensure that financial assistance reaches eligible beneficiaries more efficiently.
The latest financing adds to a growing list of World Bank-supported projects approved under President Bola Tinubu’s administration.
Since the administration assumed office in May 2023, Nigeria has secured more than $11.4 billion in World Bank loan approvals across key sectors, including power, agriculture, healthcare, education, digital infrastructure, financial inclusion and social protection.
However, only part of the approved funding has been disbursed, with several projects still at various stages of implementation.
Government officials have maintained that expanding the cash transfer programme is essential to protecting vulnerable Nigerians from the short-term effects of economic reforms while laying the foundation for long-term economic stability.
However, the fresh borrowing has renewed concerns among economists and policy analysts over Nigeria’s rising debt burden and increasing dependence on external financing.
Critics have called for greater transparency in the utilisation of borrowed funds and improved monitoring of social intervention programmes to ensure that the intended beneficiaries receive the support.
According to data from the Debt Management Office (DMO), Nigeria’s total public debt stood at approximately ₦159.28 trillion as of December 31, 2025, with multilateral lenders, particularly the World Bank, accounting for a significant portion of the country’s external debt portfolio.
Despite the concerns, analysts note that World Bank loans are generally concessional, offering lower interest rates and longer repayment periods than commercial loans.
They argue that the ultimate value of the new financing will depend on effective implementation, accountability and the successful delivery of cash support to vulnerable households across the country.
Socio-Economic Rights and Accountability Project (SERAP) has filed a legal action against the Independent National Electoral Commission (INEC) for allegedly failing to investigate claims that governors under the All Progressives Congress (APC) diverted N800 billion from public funds to finance President Bola Tinubu’s re-election bid.
The lawsuit, marked FHC/ABJ/CS/1426/2026, was filed last week before the Federal High Court in Abuja.
SERAP is asking the court to issue an order of mandamus directing INEC to investigate the allegations and compel the commission to obtain full disclosure from the APC and the governors on the alleged campaign fund, including the identities of donors and the lawful sources of the funds.Campaigns & Elections.
The organisation is also seeking an order directing INEC to commence a formal review into compliance with Section 91 of the Electoral Act by political parties and candidates, particularly regarding the sources and scale of campaign financing in the current political cycle.
According to SERAP, the allegations raise serious concerns about political finance transparency, electoral integrity and Nigerians’ constitutional right to participate freely in governance.
In the suit filed on its behalf by lawyers Kolawole Oluwadare and Kehinde Oyewumi, the organisation argued that the reported diversion of public funds for political purposes poses a significant threat to the credibility of the 2027 general elections.
It maintained that opaque political financing remains a major gateway for corruption and undermines public confidence in democratic institutions.
“The abuse of state resources for electoral advantage undermines democratic integrity and public trust. Fairness, transparency, and accountability in political or campaign finance are essential safeguards against corruption, state capture, and undue influence in democratic processes,” SERAP stated.
The organisation argued that Section 91 of the Electoral Act empowers INEC to regulate political donations, require disclosure of campaign contributions and enforce sanctions where donation limits are exceeded.
It noted that political parties found to have exceeded donation limits are liable to a fine of up to N10m and forfeiture of excess funds, while individuals who exceed the legal threshold face fines amounting to five times the excess contribution.
SERAP further contended that the commission has constitutional and statutory obligations to ensure transparency in political financing and prevent the misuse of public resources for electoral advantage.
According to the group, allegations involving large-scale public funds and opaque financial arrangements fall squarely within INEC’s investigative and monitoring responsibilities under the Constitution and the Electoral Act.
The suit also cited Sections 13, 14(2)(c) and 15(5) of the 1999 Constitution (as amended), arguing that they impose obligations on public institutions, including INEC, to safeguard democratic participation, prevent corruption and uphold constitutional principles.
SERAP further relied on international legal instruments, including the African Charter on Human and Peoples’ Rights, the International Covenant on Civil and Political Rights and the United Nations Convention against Corruption, which it said require transparency in political financing and accountability in the management of public resources.
The organisation argued that any diversion of public funds for campaign purposes would amount to a violation of both domestic and international legal obligations and would undermine the principle of a level playing field in elections.
No date has been fixed for the hearing of the suit.
Hydrogen Payment Services Company Limited has reinforced its commitment to community impact through an employee-led blood donation drive in partnership with the Lagos State Blood Transfusion Service (LSBTS) and Gbagada General Hospital.
Held recently, the initiative extended this year’s World Blood Donor Day campaign, themed “One Drop of Humanity. Give Blood. Save Lives.” It brought together Hydrogen employees in a collective effort to strengthen blood reserves for patients across Lagos State.
The drive recorded strong participation, with employees voluntarily donating blood to support critical healthcare needs, including emergency care, surgical procedures, maternal health, sickle cell treatment, and assistance for accident victims. The contributions will help bolster the state’s blood bank and improve access to life-saving interventions.
Medical teams from LSBTS and Gbagada General Hospital supervised the exercise and engaged participants on the importance of regular voluntary blood donation. They also addressed common misconceptions, reinforcing the role of consistent donors in maintaining a safe and adequate blood supply.
Dr. Folashade Tawak, Senior Medical Practitioner with the Lagos State Government, commended the initiative.
“Voluntary blood donation remains one of the most impactful ways individuals can contribute to saving lives. We commend Hydrogen for driving this initiative and encouraging active employee participation. Efforts like this are critical to sustaining the blood reserves needed for patients in urgent need,” she said.
Fiyinfoluwa Olorunsola, Acting Chief Executive Officer of Hydrogen, said the initiative reflects the company’s broader purpose.
“At Hydrogen, our responsibility goes beyond building payment infrastructure. We are committed to making a meaningful difference in the communities we serve. This drive brings our people together around a cause that directly saves lives, and I am proud of the culture we are building, defined by purpose, compassion, and service,” she noted.
Also speaking, Obinna Ojekwe, Head of Marketing and Communications, highlighted the personal impact of the initiative: “While we enable the seamless movement of value every day, this initiative allowed us to give something more personal. Knowing that a simple act can save lives makes this deeply meaningful, and it reflects the kind of organisation we are proud to be part of.”
The blood donation drive underscores Hydrogen’s commitment to creating value beyond financial transactions by empowering its employees to contribute meaningfully to society. It forms part of the company’s broader 2026 employee volunteering and CSR programme, with additional community-focused initiatives planned throughout the year.
Hydrogen Payment Services Company Limited Hydrogen Payment Services Company Limited (Hydrogen) is Africa’s institutional payments infrastructure partner, enabling financial institutions and large organisations to process, move, and settle payments at scale with trust and operational integrity.
Through resilient, Africa-focused infrastructure, Hydrogen helps institutions manage payment complexity, improve efficiency, and deliver reliable services across the continent.
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