At $28, Oil Price Almost Equals Cost of Production

Nigeria’s  crude came down to $28 per barrel on Monday. The price is expected to fall further soon as Iran rejoins the market.

It costs many oil companies between $24 and $28 to produce a barrel of crude in Nigeria; it is far less (about $8) in a country like Saudi Arabia.

What this means is that many oil fields in Nigeria may shut down when it becomes unprofitable to produce crude in Nigeria.

A post-oil economy may be coming earlier than anticipated. What will Nigeria do? What will a majority of Nigerians do?

Unless the trend is reversed, public sector — and private sector — workers would not be paid salaries anymore. The economy would collapse along with the Nigerian state.

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