Oil prices slumped last Friday after the Organisation of Petroleum Exporting Countries (OPEC) and its allies failed to reach a consensus on oil production cuts. Crude oil prices dropped by 7% to $46 per barrel on Friday.

Last Thursday, OPEC members resolved to cut crude oil production by a combined volume of about 1.5 million barrels per day (Mb/d). This is to stop further reduction in international oil price. The organisation stated that the burden of the cut would be shared with non-OPEC allies, led by Russia. (ALSO READ: Can OPEC Keep Oil Market Stable Amidst Coronavirus?)

However, last Friday, Moscow turned down the decision. It asserted that countries could export as much oil as possible from March ending when the current deal ends. Hence, refusing to tighten supply to counter the effects of the coronavirus outbreak on oil prices and the global economy. Similarly, Saudi Arabia plans to unilaterally increase oil output next month, which could further reduce prices. Already, Saudi Arabia has slashed the price it sells crude into foreign markets, beginning a price war. Consequently, this development could make matters worse for oil-dependent countries like Nigeria.

Nigeria’s economy leans heavily on oil prices and production. The country’s oil production is pegged at 2.18m barrel per day at $57 per barrel. Therefore, the shortfall from these deviations may be detrimental to the nation’s economy. Foreign reserves, Naira-dollar exchange rate and investments will be heavily affected.