Nigeria and oil-producing firms operating in the country have recorded an estimated $4 billion revenue windfall following a sharp rise in global crude oil prices triggered by the ongoing US/Israel-Iran conflict.
The war, which began on February 28, has now entered its seventh week, lasting 52 days as of the latest count. An analysis of data from the Central Bank of Nigeria (CBN) shows that prior to the outbreak of hostilities, Nigeria’s Bonny Light crude traded at an average year-to-date price of $70.14 per barrel.
However, in the 52 days since the conflict began, the average price surged significantly to $116.84 per barrel — representing a 66.6 percent increase.
Production data from the Nigerian Upstream Petroleum Regulatory Commission indicates that Nigeria’s oil output also rose during this period, climbing to 1.546 million barrels per day (bpd) in March, up from 1.483 million bpd recorded in February.
At the pre-crisis average price of $70.14 per barrel, Nigeria’s production over the 52-day period would have generated approximately $5.64 billion in oil revenue. With the elevated post-crisis price of $116.84 per barrel, the same production volume is estimated to have yielded about $9.39 billion — resulting in an additional $4 billion in earnings.
Meanwhile, crude oil prices continued their upward trend, with Bonny Light rising to $98 per barrel from $95 in the global market, following the collapse of diplomatic talks between the United States and Iran over the weekend.
Earlier, prices had dipped to around $90 per barrel from $100 amid expectations that negotiations in Islamabad, Pakistan, would lead to a resolution. The failure of those talks has since reignited market concerns, fueling renewed price increases.
Industry experts warn that the ongoing geopolitical tensions could sustain the upward trajectory of crude prices in the near term. The Chief Executive Officer of Petroleumprice.ng, Olatide Jeremiah, noted that uncertainty and instability in the global oil market are likely to keep prices elevated.
He added that the impact will extend beyond crude production, affecting the downstream sector and leading to higher prices for refined petroleum products, particularly Premium Motor Spirit (petrol). This, in turn, is expected to drive up transportation costs and the general cost of goods and services.
Echoing similar concerns, the National President of the Oil and Gas Services Providers Association of Nigeria (OGSPAN), Mazi Colman Obasi, stated that while rising energy costs will exert pressure on the domestic economy, the effect may be moderated by the operations of the Dangote Petroleum Refinery, which has a refining capacity of 650,000 barrels per day.
Despite the revenue gains, analysts caution that the broader economic impact of sustained high oil prices could pose significant challenges for consumers and businesses alike.
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