Nigeria could face a windfall from rising oil prices as Brent crude, the international crude benchmark, hit $80 per barrel on Monday as the United States and Israel air strikes on Iran plunged the Middle East into crisis.
Following the action, which commenced on Saturday, most tanker owners, oil majors and trading houses have suspended crude oil, fuel and liquefied natural gas shipments via the Strait of Hormuz, responsible for around 20 per cent of global oil flows.
Energy analysts and investment banks expect oil prices to surge this week to $90, with a chance of hitting $100 per barrel if disruptions to traffic in the crucial Strait of Hormuz persist.
As of press time, oil prices had already spiked by 10 per cent to above $80 per barrel for Brent. This could have a positive ripple effect for Nigeria, which is an oil-producing country despite challenges to production, as it uses the Brent crude price to gauge the value of its crude grades, including Bonny Light, Qua Iboe, Forcados, Escravos, among others.
Nigeria, which depends on crude for over 80 per cent of export earnings and a substantial share of government revenue, could see elevated prices translate to higher foreign exchange earnings, stronger reserves, and improved balance of payments.
Seeing the scale of the conflict and the already disrupted traffic through the Strait of Hormuz, analysts expect further spikes at least this week. This could mean higher oil export receipts, which could boost Nigeria’s foreign exchange liquidity, which can support the Naira and reduce FX volatility if the gains translate into actual FX inflows.
However, the country is plagued by volatile oil production, with oil output below the 1.5 million quota ascribed by the Organisation of the Petroleum Exporting Countries and its allies (OPEC). Latest data released last month showed that Nigeria’s production increased to 1.45 million barrels per day in January 2026 from 1.42 million barrels per day in December 2025.
Meanwhile, eight members of OPEC+, excluding Nigeria, on Sunday agreed to raise output by 206,000 barrels per day from April, a modest increase representing less than 0.2 per cent of global demand.
Citigroup expects Brent Crude to trade in the $80 to $90 per barrel range over at least the coming week in the bank’s base case.
“Our baseline view is that the Iranian leadership changes, or that the regime changes sufficiently as to stop the war within 1-2 weeks, or the US decides to de-escalate, having seen a change in leadership and set back Iran’s missiles and nuclear program over the same time frame,” analysts at Citigroup wrote in a note carried by Bloomberg.
Goldman Sachs sees an $18 a barrel real-time risk premium in oil prices. However, if only 50 per cent of flows through the Strait of Hormuz are halted for a month, the war risk premium to prices would moderate to $4 per barrel, according to Goldman.
Wood Mackenzie sees disruption in flows to push oil to above $100 per barrel.
“Higher oil and gas prices are certain as the closure of the Strait of Hormuz threatens to disrupt 15% of global oil supply and 20% of global LNG supply, with oil prices potentially exceeding $100/bbl if tanker flows are not quickly restored,” it said in a press release.
Rystad expects prices to rise by $20 to about $92 a barrel.