The trend of industrial sector performance in Nigeria since independence has been rather poor till date without substantial improvement despite the huge revenue generating from the oil sector. Therefore, this study set out to examine the oil price fluctuations and industrial output in Nigeria. This study covers the period between 1970 and 2015 which was the genesis and the peak period of increased oil price and growth in Nigeria. The study made use of secondary data sourced from various statistical bulletins of Central Bank of Nigeria (CBN) and Federal Bureau of Statistics. The study employed the econometric tools of Vector Error Correction Model (VECM)  and Vector Autoregressive scheme (VARS) to explore the long run relationship between oil price fluctuations and industrial output and the shock transmission of oil price on the industrial output respectively. The results of the VECM showed that that crude oil price, oil supply, and government capital expenditure have significant negative relationship with the industrial output in the long-run while oil export and exchange rate has significant positive relationship with the industrial output in the long-run respectively. The results of the Vector Autoregressive Model corroborated the VECM results that the response of the industrial output to shock from oil export is very significant and positive while the response to shock from government capital expenditure is not significant in the long run. Based on these findings, this study recommends that the income government is generating from crude oil should be properly channeled into productive projects that can boost the industrial growth of this country. In addition, the proceeds deriving from this crude oil should be effectively managed by the government as well as making industrialization a priority in their budgetary allocation.