Nigerian crude oil moves past $80 a barrel, highest level since mid 2024

Nigerian crude oil prices surpassed the $80 per barrel mark following American and Israeli airstrikes on Iran, which rekindled fears about the oil market.

The latest prices exceeded the FG 2026 budget benchmark of $64.85 per barrel.

Higher prices boost the Nigerian government revenue, even though the West African economy production has been below its OPEC’s quota

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Crude oil accounts for most of Nigeria’s foreign exchange earnings and a large part of government revenue, despite making up only 3–5 percent of the country’s GDP.

**Crude oil market shows high volatility  **

Brent Crude surged on Wednesday to $83 per barrel, the highest level since mid-2024, with a monthly increase of about 24%. The US and Israel attacked Iran, escalating tensions in the Middle East.

• Iran retaliated by firing hundreds of missiles and drones at neighboring countries. An attack on major energy infrastructure could be disastrous for global markets, as it could essentially halt maritime traffic through the vital Strait of Hormuz.
• The heightened anxiety in oil markets reflects Iran’s and the Persian Gulf’s influence over the world’s supply of “black gold.” The International Energy Agency estimates Iran produces around 3% of the world’s oil supply.

Additionally, tensions over the Strait of Hormuz, a critical chokepoint for roughly 20% of the world’s oil flows—are rising, along with concerns about supply disruptions and the escalating conflict involving Iran, including US and Israeli strikes.

**US President Donald Trump tries to calm fears in the global energy market **

US President Donald Trump claimed that the US would protect the ‘free flow of energy’ in the Persian Gulf through guaranteed insurance and military naval protection for US commercial vessels. However, the shipping industry remains in a state of crisis, and this proposal has had a limited impact.

• Trump’s efforts to ensure the ‘free flow of energy’ in the Persian Gulf have been largely ignored by the market.
• Market analysts, particularly insurers, owners, and charterers, have stated that the lack of engagement and detail makes the White House’s proposal insufficient to mitigate the significant risks each insurer would face.
• Severe congestion has begun in the Strait of Hormuz, leading to a minor blockage of oil flows from Panamax ships and the Saudi Grace vessel. Recent reports indicate that Saudi Arabia and Libya have started shutting down production at their largest oil fields, and there is a new oil tanker shortage in the Persian Gulf. It is also confirmed that Saudi Aramco is increasing the number of cargoes delivered to Yanbu on the Red Sea.

President Trump’s tariffs have already inflicted considerable damage on the global economy, and his looming conflict with Iran is likely to worsen that damage. Persistently high energy prices could push Europe into recession and force the Federal Reserve to raise interest rates (which are already high) to curb inflation.

• China will also face worsening conditions as discounted oil imports from Iran become unavailable, compounding the adverse effects of Trump’s tariffs and collapsing real estate prices. Saudi Arabia’s largest oil refinery is shut down,
• Qatar’s biggest LNG facility is closed, and the Strait of Hormuz is blocked. Global stocks have declined, and the Fed is expected to cut interest rates in the coming months as Treasury yields have increased in response.

Rising oil prices create ripple effects across the economy, constraining growth, fueling inflation, and raising costs for transportation and any sector relying on fossil fuels.