Over the past four months of heightened tensions involving Iran, the United States, and Israel, Nigeria has reaped significant benefits from elevated global oil prices, which at one point surged to $120 per barrel. Throughout the conflict period, crude oil consistently traded above the government’s 2026 budget benchmark of $64.85 per barrel, providing a substantial fiscal cushion.
Available figures indicate that Nigeria earned an estimated $17.78 billion in gross oil revenue between February and May 2026, representing an excess of $6.51 billion above projected income.
However, renewed optimism from peace talks between Iran and the U.S. has already begun to ease market pressures, with Brent Crude closing at $78.14 per barrel and West Texas Intermediate (WTI) at $74.18 per barrel yesterday.
Despite the windfall, Nigeria’s inability to consistently meet its OPEC production quota of 1.5 million barrels per day (mbpd) limited potential gains. Production shortfalls across the first four months of 2026 resulted in an estimated $839.22 million in lost revenue, except in May when output temporarily rose to 1.7 mbpd.
Central Bank of Nigeria (CBN) data highlights the monthly shortfalls:
- January: 45.236 million barrels produced (1.459 mbpd), shortfall of 1.264 million barrels, revenue loss of $86.02 million at $68.05 per barrel.
- February: 36.783 million barrels produced (1.313 mbpd), shortfall of 5.217 million barrels, revenue loss of $377.35 million at $72.33 per barrel.
- March: 42.868 million barrels produced (1.386 mbpd), shortfall of 3.132 million barrels, revenue loss of $332.27 million.
- April: 44.657 million barrels produced (1.488 mbpd), shortfall of 0.344 million barrels, revenue loss of $43.59 million.
Economist and policy analyst, Dr. Muda Yusuf, described the situation as a “mixed bag” for Nigeria. He explained that while falling crude prices should eventually reduce domestic pump prices for petrol, diesel, aviation fuel, and gas, the federal government’s revenue will inevitably decline.
“With the peace deal, crude oil prices will plummet and naturally cascade into the local market. Petrol prices should revert to pre-war levels, though not immediately, as distributors are still selling old stock purchased at higher prices. Within four weeks, prices should normalize,” Yusuf noted.
Already, domestic petrol prices have begun to ease, dropping to between ₦1,205 and ₦1,275 per litre, compared to ₦1,330 per litre just two weeks ago.
Yusuf, who is also CEO of the Center for the Promotion of Private Enterprise (CPPE), cautioned that while consumers may benefit from lower fuel costs, Nigeria’s fiscal position will weaken as oil revenues decline.
