By Stephen Ubanna
President Donald Trump, the North American Country of the United States, US, appears to have come out fully to show that the country’s Reciprocal Tariff, was aimed at witling down the economic powers of the Asian country of China, described as an economic giant in manufacturing circles, and the Organization Petroleum Exporting countries, OPEC, for manipulating crude oil prices in the international oil market.
Trump, who may have taken his first term in office to plot against OPEC, particular, to whittle down its enormous powers of ‘’ensuring efficient and regular supply of crude oil to the Asia country of China, and other trade partners that would guarantee the producers ‘’steady foreign exchange earnings’’ may have concluded plans on what he intends to do if he has the opportunity of ruling the US, in future. The opportunity came on January, 2025.
It was not surprising why the US President, who had authored a book, ‘’Trump Never Gives Up’’ and who had initiated the economic policy of ‘’individualized reciprocal higher tariff’’ on the countries with which the US, claims to have had the largest trade deficits like the Asian country of China and some other 185 trade partners. The US, government had started the implementation of the reciprocal tariff policy on Tuesday, April 9, 2025.
The US President had announced that exports from Nigeria, including crude oil, which is the country’s major source of foreign exchange earnings to the US, will now be subjected to 14% higher tariff as Nigeria had imposed US27$ tariff on exports from US, showing a disparity of US$13, which the US President had said had been detrimental to the country’s businesses jus like its trade with other countries.
Although the US President has given the impression that some of its trade partners will continue to be subject ‘’to the original 10% tariff borderline’’, he may not be telling the world the truth as he may have targeted the Organization of Petroleum Exporting Countries, OPEC, to which Saudi Arabia and some other Middle East countries including Nigeria belonged to to weaken its economic powers.
It would be recalled that on February 20, 2025, the US President, had signed several energies -related executive orders intended ‘’to boost US oil and gas production and exports by declaring a national energy emergency, removing regulatory barriers, and expediting permitting approval for oil and gas prospects’’.
There is no gain saying the fact that with the rapid growth in oil and gas production level over the last two decades in the US, due to the shale boom, which had already positioned the country as one of the country’s largest oil and gas producers, ‘’it would be a net exporter’’. In 2022, the country was said to have produced 22mbp/d, accounting for 22% of the world’s total produce.
Note that OPEC, over the years, had been involved in stabilizing the international oil market by coordinating and unifying petroleum policies of member countries by adjusting their production levels to influence prices in the international oil market, and participating in international forums ‘’to promote dialogue and cooperation in the global energy’’ which the US Government may not have found funny.
Despite claims of being energy independent, the US government never stopped importing Crude Oil from Nigeria, Venezuela and other OPEC, member countries but wants to be dictating the prices at which it would buy a barrel of crude oil at the international oil market and not price fixed by the oil cartel.
Perhaps, to frustrate the OPEC member countries monopoly of sale of crude oil in the international oil market, may have informed why Trump has allowed’’ the free export of the North American country’s crude oil, worldwide to hit back at OPEC.
Repealing the ban on the export of the country’s crude, by President Trump, according to energy experts was aimed at’’ expanding the US, Crude oil supplies overseas’’ and allowing producers ‘’to charge higher prices comparable to what OPEC members charge for their crude oil supplies to their overseas customers.
The energy experts noted that Trump may have taken the bold policy initiative to ensure a decreasing demand for US. Oil tankers by OPEC member countries in order to have enough of such tankers to move the country’s crude, which many believe would backfire on the economy as it will result in declines in US Shipping industry.
Recall that Trump had earlier sent a signal to the OPEC member countries of what the US government intends to do when he had threatened to revoke the operating license which allows Venezuela ‘’to export some of its crude oil supplies to the US, market’’.
Described as going to be a major blow to the Venezuelan Government, the licences were said to have provided the OPEC member country an opportunity through joint ventures between the state owned -run oil company and US oil giant Chevron, with a crucial income in the US dollars
Until the US Government finally revoked the Venezuelan licenses that allows it to supply crude oil to the country, the Licences had allowed the US oil company, Chevron, ‘’to operate joint ventures with the Venezuelan ‘s state -oil controlled company , PDVSA, as obtained in Nigeria, where Chevron operates a joint venture with the Nigerian National Petroleum Corporation, NNPC, now baptized Nigerian National Petroleum Company Limited, NNPCL, with the passage of the Petroleum Industry Bill, PIB, signed into Law by former President Muhammadu Buhari, in August, 2020. The US company was said to have been barred by Trump from paying any taxes or royalties to the Venezuelan Government’’ which Financial believes was to rubbish its economy.
Mike Wirth, Chevron Chief Executive Officer, CEO, in Venezuela, who could not hide his feelings had said that if the company was eventually forced to pullout of Venezuela by the US Government, it would not hesitate but ‘’to allow companies from China and Russia to increase their presence and economic influence in Venezuela’’ to avoid stagnating the economy
The current price of WTI crude oil futures is around the US $61.50 per barrel while the Bonny Brent produced in Nigeria is US$64.76 per barrel but the recent announcement by Trump to revoke the Licences which allows Venezuela to supply some of its crude oil produce to the US, market, may have had an adverse effect on the international crude oil market prices which was said to have risen by more than 1% on Thursday, April 10, 2025.
The Nigeria Government had set the 2025, benchmark crude oil price at US$75 per barrel and production target of 2.6 million barrels per day, but recent events in the international oil market and the US reciprocal tariff war and cancellation of the licences which allows Venezuelan Government to supply some of its crude oil to the country’s market may have affected the Nigeria 2025, Fiscal budget.
At present, the Nigeria Crude oil produce, Brent, prices in the international oil market, according to informed sources had dropped bellow US$70 per barrel, just as the country’s oil output has fallen short of expectations, potentially jeopardizing the country’s 2025 budget’s revenue projections.
There is no gain saying the fact that the combination of lower prices in the international oil market and production shortfalls could lead to a shortfall in revenue that may force President Bola Ahmed Tinubu’s Administrations ‘’to cut spending on provision of basic infrastructural facilities and completion of ongoing projects across the country or resort to borrowing from multi-lateral financial institutions like the World Bank, Paris Club and London Club, to finance the 2025 budget.
Notwithstanding, the Trump fever that had gripped the US trade partners, including Nigeria since his return as US President, in January 2025, the reciprocal tariff which he had introduced and the executive orders which he had signed last February on energies- related matters may have made matters worse for 47 African countries.
Ngozi Okonjo-Iweala, a former minister of Finance and Coordinating minister of the economy durin former Presidents Olusegun Obasanjo, Goodluck Jonathan at different times and now Director General, World Trade Organization, WTO, had said that the US government newly introduced reciprocal tariff, will have ‘’substantial implications for global trade and economic growth prospects’’.
The WTO, Director General, who was said to have sounded loud and clear that the US government reciprocal tariff coupled with other measures introduced he had introduced since the beginning of the year 2025, could further lead to an overall ‘’contraction of around 1% in global merchandise trade volume this 2025, which she had said represented a downward vision of 4% points from previous projections.
’I am concerned about this decline in the volume of global merchandise trade and the potential for escalation into a tariff war between the US, China and OPEC member countries with a cycle of retaliatory measures that may further lead to declines in trade’’, she had remarked.
Speaking at a recent World Economic Forum in Davos, Switzerland, Okonjo Iweala, the WTO, boss who could not hide her feelings had warned that President Trump threatened reciprocal tariffs against China, the European Union, EU, Mexico and Canada should not attract retaliatory measures, stressing that there is need for ‘’cooler heads to prevail’’ in this trying period of the global economy. ‘’Let’s not hyperventilate on the US tariffs to avoid throwing the global economy into crisis’’, she was said to have further told the participants at the Davos, Switzerland, Forum.
Putting on the garb of the Director General of WTO, she had said, ‘’ If we have tit for tat retaliation, whether 25% or 60%, and we take the global trade back to what it was in the 1930s, member countries of the world trade body are going to see double-digit Gross Domestic Product, GDP, losses, double -digit that is catastrophic’’.
Akinwumi Adesina, a former minister of Agriculture and Rural Development, during former President Goodluck Jonathan’s Administration in Nigeria, and now President of African Development Bank , AfDB, may have hit the nail on the head he urged US trade partners to wake up from sleep when he warned on Friday, Friday, April 11, 2025, in Lagos, the nation’s commercial nerve center , that the US reciprocal tariff will lead ‘’to reduced trade and higher debt-servicing costs for debtor nations’’.
The AfDB, Chief had alluded to the fact that 47 African countries including Nigeria stand the risk of even higher tariffs – that will cause the local currency to weaken on the back of the foreign exchange earnings due to the US reciprocal tariffs.
He fears that ‘’inflation will increase as costs of imported goods rise and currencies devalue against the US dollar, used in international transactions’’. His worries for now were that the cost of servicing debts as a share of government revenue will rise, as expected revenues decline decline in these 47 African countries, particular.
Olayemi Michael Cardoso, governor, Central Bank of Nigeria, had assured importers and multi-lateral financial institutions that there was no cause over drop in oil price in the international oil market as the country ‘s US over $42 billion external reserves can finance importation of goods and services external debts as at when do for more than nine months.
The CBN, governor who had appeared before the Senate Committee on Banking recently was said to have also assured Nigerians of better economic fortunes this 2025. He had stated categorically that that the country’s external reserves rose from US $38.35 billion in Sept. 3024 to US$42.01 billion in December 12, 202024, driven largely receipts from crude oil-related taxes and third part receipts in 2024.
He was emphatic that Nigeria has maintained a current account surplus and saw remarkable improvements in its trade balance with partners including the US, which had had imposed reciprocal tariff of US $14, against exports from Nigeria.
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