Portugal Looks to Nigeria and US for LNG as Energy Realignment Reshapes Markets
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Portugal has announced plans to increase its imports of Liquefied Natural Gas (LNG) from Nigeria and the United States, a strategic move to reduce reliance on Russian energy supplies. This pivot comes amid tightening sanctions on Russian oil and gas, a policy driven by the European Union’s response to Moscow’s invasion of Ukraine.
Portuguese Environment Minister Maria da Graça Carvalho confirmed the development at the World Economic Forum in Davos. Speaking on Tuesday, she stated, “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.”
Portugal’s shift underscores a broader European strategy to diversify energy sources. In 2024, Portugal imported 49,141 gigawatt-hours of natural gas, with LNG comprising 96% of the total, according to data from electricity and gas grid operator REN. Nigeria supplied 51% of Portugal’s LNG needs, while 40% came from the US and 4.4% from Russia.
The EU has imposed targeted sanctions on Russian energy imports through pipelines but has stopped short of banning LNG shipped into the bloc, leaving room for countries like Portugal to maintain minimal ties with Russia while actively seeking alternatives.
Impact on Nigeria: Opportunity and Risk
While Nigeria benefits from Portugal’s increasing demand for LNG, its oil-dependent economy faces growing uncertainty due to shifts in global energy policy. A report by SB Morgen Intelligence warns that the aggressive energy strategy of former US President Donald Trump—should it resurface—could jeopardize Nigeria’s fiscal sustainability.
Trump’s “Drill, baby, drill” doctrine significantly increased US oil production during his administration, flooding global markets and driving down prices. Nigeria’s economy, which derives over 90% of its revenue from oil exports, remains vulnerable to such market shocks.
In its latest report, SBM Intel highlighted that Nigeria’s ambitious 2025 budget, which assumes an oil price of $75 per barrel, could falter if US policies drive prices lower. “Nigeria’s reliance on oil exports leaves it dangerously exposed to price volatility. A sustained drop in global oil prices could unravel government spending plans, delay infrastructure projects, and deepen fiscal instability,” the report stated.
A Looming Crisis
Nigeria’s economic fragility is further underscored by its soaring debt levels, expected to rise to ₦187 trillion this year, according to CardinalStone, an investment and research firm. Lower oil prices could force the country to borrow at prohibitive interest rates, exacerbating fiscal imbalances and hindering critical public services.
SBM Intel warns of cascading effects across Nigeria’s economy. Reduced federal allocations could deepen regional inequalities, particularly in poorer states reliant on oil revenues. Social safety nets and public-sector wages could also be at risk, potentially plunging millions into deeper poverty.
The Path Ahead
For Nigeria, the growing demand for its LNG offers a glimmer of hope, but it is no panacea for the challenges posed by oil price volatility and fiscal mismanagement. As Portugal and other nations reorient their energy strategies, Nigeria must urgently diversify its economy, bolster domestic refining capacity, and improve fiscal discipline to navigate an increasingly precarious global energy landscape.
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