Global oil prices surged past Nigeria’s 2025 budget benchmark of $75 per barrel, driven by escalating hostilities between Iran and Israel.
Brent crude climbed by 5.29 per cent to $77.04 per barrel, while the US West Texas Intermediate (WTI) rose by 5.28 per cent to $74.84, marking a sharp rebound in global oil markets.
The surge comes in the wake of intensified regional tensions after Israel launched airstrikes on key Iranian energy infrastructure, including the Shahran oil depot. Iran, in turn, temporarily shut down gas production at its South Pars field — one of the world’s largest — which it shares with Qatar, following a fire caused by the Israeli attacks.
Although there has been no major disruption in oil flows, analysts say fears of supply insecurity are fuelling price volatility.
On Friday, 13 June, oil prices recorded their largest single-day gain in over four months — rising more than 7 per cent — as fears of wider conflict in the Middle East gripped global markets.
The recent rise in prices could translate into a potential windfall for Nigeria, which pegged its 2025 budget on a $75 per barrel oil price and an exchange rate of N1,500 to the dollar. Higher oil prices typically mean increased revenues for the country, which relies heavily on crude exports to fund government expenditure.
However, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reported that crude oil production dipped to 1.45 million barrels per day in May — representing 97 per cent of the country’s OPEC quota. This production figure includes condensates.
Despite the dip, Nigeria maintained its position as Africa’s top oil producer, ahead of Libya (1.36 million bpd), Algeria (920,000 bpd), and Congo (268,000 bpd), according to the latest monthly report from the Organisation of the Petroleum Exporting Countries (OPEC).
OPEC also reaffirmed its global oil demand growth forecast for 2025 at 1.3 million barrels per day, indicating continued optimism about the market’s long-term fundamentals despite geopolitical disruptions.
While the oil price rally presents a fiscal opportunity for Nigeria, experts warn that without improved production levels and infrastructure security, the country may not fully benefit from the price surge.
