Effect of Crude Oil Prices and Production on the Performance of Nigerian Gross Domestic Product: A Conceptual Framework

Abstract

The Nigerian economy heavily relies on crude oil exports as a major source of revenue, and fluctuations in crude oil prices. This study aims to examine the relationship between crude oil prices and production on the performance of Nigerian Gross Domestic Product. The conceptual review was used as the methodology for this study which involves a thorough review of relevant literature on the impact of crude oil prices and production on the Nigerian economy. This conceptual review examines the effect of crude oil prices and production on the performance of Nigerian Gross Domestic Product (GDP) from economic, social, and environmental perspectives. The impact on foreign exchange earnings, trade balances, and fiscal balances are some of the economic dimensions that can be observed. In terms of social dimensions, the oil industry provides direct and indirect employment opportunities for millions of people in Nigeria. Therefore, fluctuations in crude oil prices and production can affect employment opportunities and living standards. The environmental dimension is also reviewed, and the negative impacts of crude oil exploration, production, and transportation activities on the environment are considered. This framework suggests that understanding the effect of crude oil prices and production on the performance of Nigerian GDP is crucial for policymakers and investors to make informed decisions and ensure sustainable development in Nigeria.