Major oil companies around the world have recorded sharp drops in profit in the first quarter of 2025, as the fall in global oil prices and rising production costs continue to affect their financial performance. This development is now raising serious concerns, especially for countries like Nigeria that depend heavily on oil income to run their economies.
American oil giant, ExxonMobil, announced that its profit for the first three months of 2025 dropped to $7.71 billion, which translates to $1.76 per share. This is lower than the $8.22 billion profit it recorded in the same period last year, when earnings were $2.06 per share. The company’s revenue also did not meet the expectations of financial experts, standing at $83.13 billion.
Another major American oil company, Chevron, reported that its profit for the same period was the lowest it has recorded in recent years. It posted earnings of $2.18 per share with total revenue of $47.61 billion. Chevron and ExxonMobil blamed the drop in profits on weaker demand for energy and the sharp fall in crude oil prices. As at now, crude oil is selling for less than $60 per barrel, which is about 30% lower than the price in the same period in 2024.
European oil companies are not left out. TotalEnergies, one of the big players in the global energy market, recorded an 18% drop in adjusted net income for the first quarter of 2025, reporting $4.2 billion. This figure also fell below what market analysts had predicted. Following the announcement, the company’s share price dropped by 4%. One major worry for TotalEnergies is its increasing debt, which jumped from $10.9 billion at the end of 2024 to $20.1 billion by March 2025. Although the company increased its oil and gas production by 4%, the profit from its upstream operations still dropped by 6%, mainly due to falling crude oil prices.
The global oil sector is now facing what many industry watchers describe as its toughest period since the COVID-19 pandemic. Between 2022 and 2024, the net income of the entire industry dropped by about $90 billion. The situation has been made worse by the increase in oil supply by the Organisation of Petroleum Exporting Countries (OPEC) and the growing political tension in many parts of the world.
For Nigeria, this situation is troubling. The country depends on oil for over 90% of its export income and about 65% of the government’s revenue. Experts warn that if oil prices remain low for long, Nigeria may face serious problems such as a shortage of dollars and more pressure on the value of the naira. Already, there are signs that the country may not meet its revenue targets for the year.
To respond to the crisis, the Federal Government, under the leadership of President Bola Ahmed Tinubu, has launched several renewable energy projects. One of the key steps taken is the introduction of a $1 billion Green Energy Transition Fund, which is meant to attract investment in solar, wind, and hydroelectric power. Since the launch of the fund, there has been a 15% increase in renewable energy projects in the country. Nigeria has also entered partnerships with international companies to develop clean energy solutions.
Even though these efforts show promise, experts say there are still many challenges. The oil industry still has a lot of influence in the country, and some powerful people may resist change. There is also the need for ordinary Nigerians to support the government’s move toward renewable energy. To make real progress, the government will have to simplify the rules for doing business, especially for investors in non-oil sectors. Collaboration between business owners, traditional rulers, civil society groups, and government agencies will be key to making any reform work.
As the global oil market continues to face uncertainty, the future of Nigeria’s economy may depend on how well the country can reduce its dependence on crude oil and grow other sectors of the economy.
