By Abbati Bako
Research indicates that crude oil transactions annually reached around $4 Trillion globally (the global economic capital has been around $90 Trillion or £60 Trillion and according to Professors John Baylis, Steve Smith, Patricia Owen/Others; $1.04 Trillion global economic interplay/transactions takes place daily globally) “The Globalization Of World Politics, USA 2008/2011/2014/2017
/2020” United Kingdom. Crude oil is the wheel and heart of the global economy.
Hence, this writing observed that oil is a wheel in the global economy but trade and services give about 90% of global economic interplay. Nigerian oil deals give around 90% of its foreign earnings. Although crude oil can be utilized into about 500 different useful products and millions of employment all over the world. Crude oil is one of the most valuable products in economic growth and development for human existence.
Crude oil plays a vital role in the global economic interplay, and Nigeria is a significant player in the oil market. Here are the importance of crude oil and Nigeria’s role:
*Importance of Crude Oil:
1. Energy Source Crude
Oil is a primary energy source, powering industries, transportation, and households.
2. Global trade: Oil is a widely traded commodity, influencing global trade patterns and economic relationships.
3. Economic growth: Oil revenues contribute significantly to the GDP of oil-producing countries, driving economic growth and development.
4. Industrial feedstock:
Oil is a raw material for various industries, such as petrochemicals, plastics, and fertilizers.
5. Strategic resource:
Oil is a strategic resource, with geopolitical implications, influencing international relations and global security.
Nigeria’s Role:
1. Oil exporter:
Nigeria is a major oil exporter, with oil accounting for over 90% of its export earnings.
2. OPEC member:
Nigeria is a member of the Organization of the Petroleum Exporting Countries (OPEC), influencing global oil production and pricing decisions.
3. Regional player:
Nigeria is a key player in West African regional politics and economy, with oil revenues shaping its regional influence.
4. Economic growth driver:
Oil revenues drive Nigeria’s economic growth, with the oil sector contributing significantly to its GDP.
5. Challenges and Opportunities:
Nigeria faces challenges like oil price volatility, corruption, and environmental degradation, but also has opportunities to diversify its economy and invest in renewable energy.
*Analysis of the situation:
Nigeria’s role in the global oil market is significant, and its economy is heavily reliant on oil exports. However, the country is working to diversify its economy and reduce its dependence on oil revenues. Nigeria is number 6 oil producing nation in the world. Brazil is an oil producing nation but 74% depends on agrarian economy. Also, Saudi Arabia’s dependency on oil for foreign earnings is around 74% but tourism and other resources seems to be talking positive dimensions.
What significant contributions will Dangote refinery that located in Lagos Nigeria give to Nigeria and the global economy?
The Dangote Refinery located in Lagos, Nigeria, is expected to make significant contributions to both the Nigerian and global economies in the following ways:——-
Reduced oil import dependence:
The Dangote refinery is expected to meet 100% of Nigeria’s refined petroleum product needs, reducing the country’s reliance on imported petroleum products and saving foreign exchange.
– Increased domestic refining capacity:
The refinery has the capacity to process 650,000 barrels of crude oil per day, making it the largest single-train petroleum refinery in the world
Job creation:
The refinery is expected to create thousands of direct and indirect jobs, contributing to Nigeria’s economic growth and job market
Stimulated economic growth:
The refinery is expected to stimulate economic growth by increasing the availability of petroleum products, reducing prices, and increasing government revenue
Increased government revenue:
The refinery is expected to increase government revenue through taxes, royalties, and other payments
Improved energy security:
The refinery is expected to improve Nigeria’s energy security by reducing the country’s reliance on imported petroleum products and increasing the availability of petroleum products
Global market impact:
The refinery is expected to have an impact on the global market by increasing the supply of petroleum products, reducing prices, and increasing competition
Foreign exchange savings:
The refinery is expected to save foreign exchange by reducing the need for imported petroleum products, estimated to be around $25-30 billion annually (an amount close to Nigeria’s annual budget
Support for allied industries:
The refinery is expected to support allied industries such as transportation, logistics, and manufacturing by increasing the availability of petroleum products and reducing prices.