US–IRAN CONFLICT: FG RAKES IN ₦5TN OIL WINDFALL AS NIGERIANS FACE FUEL HARDSHIP

Nigeria’s oil revenue has seen a massive surge, with estimates showing a windfall of about N5.13tn within two months, driven by a sharp rise in global crude prices following tensions linked to the United States–Iran conflict. The spike pushed earnings far above projections in Nigeria’s 2026 budget.

The conflict, which began on February 28, initially saw oil trading below $70 per barrel. However, prices quickly climbed as tensions escalated, at one point crossing $120 per barrel. Brent crude later traded around $110, while Nigeria’s Bonny Light crude rose to about $134.

Nigeria’s 2026 budget is based on an oil production target of 1.8 million barrels per day, a benchmark price of $64.85 per barrel, and an exchange rate of N1,400 to the dollar. Under these assumptions, expected daily oil revenue stands at about N163.42bn.

However, actual performance in March and April significantly exceeded these expectations due to higher crude prices, despite fluctuations in production levels.

In March, production averaged about 1.55 million barrels per day, with crude priced at an average of $95.03 per barrel and the exchange rate around N1,370 to the dollar. This translated to daily earnings of roughly N201.80bn, creating a daily surplus of about N38.38bn compared to the budget benchmark. Over the month, this resulted in an estimated gain of N1.19tn.

April saw an even stronger performance as both production and prices increased. With output rising to about 1.7 million barrels per day and crude averaging $127.05 per barrel, daily revenue climbed to approximately N294.84bn. This generated a daily windfall of about N131.42bn, pushing total April gains to an estimated N3.94tn.

When combined, the total windfall across both months reached approximately N5.13tn, with April accounting for the bulk of the increase. The surge was largely driven by higher global oil prices rather than significant improvements in production.

Analysts noted that while the price rally boosted government revenue in the short term, it also exposed Nigeria’s continued reliance on volatile global oil markets. Without the price spike, earnings would have been significantly lower despite similar production levels.

The ripple effects of rising crude prices have also been felt domestically, as fuel costs increased across the country. Retail prices of petrol climbed sharply, with pump prices rising in several locations due to adjustments by marketers and refiners.

Industry stakeholders have urged the government to introduce relief measures to cushion the impact on citizens, suggesting that a portion of the windfall be used to reduce transportation and living costs. Energy economists have also called for targeted support to protect vulnerable households from inflationary pressures driven by fuel price increases.

Local refiners have further argued for a review of crude pricing for domestic use, insisting that reliance on international benchmarks inflates costs and affects local refining operations.

Despite the revenue boost, experts warn that Nigeria remains exposed to global oil price volatility. A downturn in crude prices could quickly reverse the gains, highlighting the need for stronger diversification and more stable revenue sources.

Overall, the development underscores a dual reality: increased government earnings from oil amid global tensions, alongside rising domestic cost pressures for consumers.