Nigerian crude oil is projected to reach $100 per barrel this month as global supply chains face severe disruption following escalating military conflict between the United States and Iran.
Nigerian Bonny Light crude last traded above $90 per barrel, representing a roughly 33 per cent increase this week, while Brent crude prices surged above $92 on Friday, extending weekly gains to over 27 per cent.
The federal government’s revenue is expected to rise sharply from this price spike, with Nigeria’s 2026 budget benchmarked at a much lower $64.85 per barrel, creating potential windfall gains for state finances.
However, Nigeria remains a net importer of refined fuels despite increased production from Dangote Refinery, meaning domestic fuel prices and inflation will likely increase as a result of global oil market volatility.
Dangote Petroleum Refinery raised petrol prices to N995 per litre at its gantry this week, implementing two price increases totaling N221 within less than seven days.
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The Strait of Hormuz handles approximately 20 per cent of global oil supply daily, but maritime traffic through this critical passage has almost entirely stopped as Iran threatens to attack vessels attempting to cross.
Available oil supertankers in the Gulf region have reduced significantly, with producers being forced to cut output as storage tanks fill up daily while oil cannot pass through the strait.
Physical energy markets already show significant strain, with diesel and jet fuel prices skyrocketing due to refinery cuts across the Middle East and Asia following Iranian missile attacks on energy facilities.
Major financial institutions including JPMorgan and Goldman Sachs predict prices could exceed $100 and potentially reach $150 by summer if the strait remains blocked for several weeks.
President Donald Trump announced that the United States will provide naval escorts and insurance guarantees for oil tankers through Hormuz, aiming to calm markets after gasoline prices rose sharply.
Market participants warn that the global energy market has grown too complacent about prolonged closure risks, noting that any sign of hostilities ending would cause prices to fall sharply again.
The International Monetary Fund has warned that sustained oil price increases could push global inflation upward by 40 basis points, adding to economic pressures worldwide.
