Nigeria’s bid to secure a record $5 billion oil-backed loan from Saudi Aramco has hit turbulence as crude prices tumble.
Four sources told Reuters the sharp fall in oil prices has alarmed banks expected to co-fund the deal, stalling progress on the agreement.
President Bola Tinubu first discussed the deal with Saudi Crown Prince Mohammed bin Salman in November at the Saudi-African Summit.
The deal would mark Aramco’s first major financing venture in Nigeria and the country’s largest such facility to date.
However, Brent crude has plummeted roughly 20% since January, from over $82 per barrel to around $65, undermining loan terms.
A lower oil price means Nigeria would need to commit more barrels to secure the loan, straining its already-limited production capacity.
The country is grappling with years of under-investment in its oil sector, weakening its ability to boost output and meet obligations.
Nigeria is already using at least 300,000 barrels per day to repay existing oil-backed loans, which total nearly $7 billion.
The proposed Aramco facility would require about 100,000 barrels per day, nearly doubling Nigeria’s oil commitments to creditors.
Banks involved, including Gulf institutions and one African lender, have raised doubts over Nigeria’s ability to deliver the promised cargoes.
“It’s hard to find anyone to underwrite it,” one source said, highlighting delivery and repayment risks amid falling oil revenues.
Neither Aramco nor Nigeria’s state oil firm NNPC commented on the stalled negotiations; the finance and petroleum ministries also remained silent.
Oil trader Oando is expected to manage physical cargoes under the deal, though it too declined comment.
With production lagging at 1.5 million bpd in April, well below the 2 million target, Nigeria’s oil ambitions face growing pressure.
