Portugal has announced plans to increase its imports of Liquefied Natural Gas (LNG) from Nigeria and the United States in an effort to reduce its reliance on dwindling Russian supplies. The decision follows the European Union’s sanctions on Russian oil and gas imported via pipelines after the invasion of Ukraine in 2022.
Portuguese Environment Minister Maria da Graca Carvalho stated at the World Economic Forum in Davos, “Portugal is now practically independent of Russian gas … but we want to reduce this figure further by importing more gas from Nigeria and the United States.”
In 2024, Portugal imported approximately 49,141 gigawatt-hours of natural gas, with 96% of it being LNG. Nigeria supplied 51% of these LNG imports, while 40% came from the United States and 4.4% from Russia. This marks a significant shift from 2021, when Russia accounted for 15% of Portugal’s LNG supply.
Energy Challenges and the Role of the U.S.
The Portuguese minister also emphasized the need for stronger energy cooperation within the European Union, particularly in addressing the challenges faced by the Iberian Peninsula, which she described as an “energy island” due to limited interconnections with France.
Meanwhile, U.S. President Donald Trump’s energy policies could have broader implications for global markets. His push for increased U.S. oil production under the “Drill, baby, drill” agenda is expected to bolster U.S. energy independence but could also flood the global market with oil, driving prices down.
Implications for Nigeria’s Economy
Nigeria, Africa’s largest oil producer, faces potential risks from the global market dynamics influenced by Trump’s policies. A Lagos-based research firm, SBM Intelligence, warned in its report, The Ripple Effect: How Trump’s Policies Will Impact Africa, that Nigeria’s fiscal stability could be at stake.
“Nigeria’s economy relies heavily on oil exports, and Trump’s pledge to flood the global market with American oil seriously threatens the country’s financial stability,” the report noted.
The country’s 2025 budget, predicated on an oil price target of $75 per barrel, is vulnerable to price reductions. A decline in oil prices could undermine government revenues, increase borrowing, and strain funding for infrastructure and social programs.
Fiscal Challenges Ahead
Nigeria’s debt is projected to rise to ₦187 trillion in 2025, exacerbating fiscal instability. Lower oil prices could lead to delayed public sector wages, debt servicing difficulties, and increased poverty. The ripple effects across other sectors of the economy would further deepen Nigeria’s economic challenges.
Global Energy Shifts
As Europe seeks to secure energy independence and diversify its supply chains, Nigeria’s role as a key LNG supplier remains significant. However, balancing global energy policies, shifting oil markets, and domestic fiscal sustainability will require strategic planning to mitigate economic risks.
