The Digest:
Global crude oil prices have climbed to $68 per barrel, the highest level in four months, driven by escalating tensions between the United States and Iran. Brent crude rose 2.24% to $68.88, while U.S. West Texas Intermediate increased by 1.9% to $64.41. Reports indicate the U.S. is considering targeted military strikes against Iran, raising concerns over potential disruptions to Iran's daily output of approximately 3.2 million barrels. The current price exceeds Nigeria’s 2026 budget benchmark of $64.85 per barrel. President Bola Tinubu had based the N58.18 trillion budget on a conservative oil price projection, which may now provide a fiscal cushion if the rally is sustained.
Key Points:
- Higher oil prices could boost Nigeria’s foreign exchange earnings and support the naira.
- Increased revenue may ease fiscal pressure and improve the capacity to fund the 2026 budget.
- Geopolitical instability in the Middle East remains a key driver of global energy price volatility.
- Sustained price levels above the budget benchmark offer a positive buffer for national planning.
- Nigeria’s oil-dependent economy remains vulnerable to external shocks despite short-term gains.
Sources: Reuters, Oil Price Data, Nigerian Budget Office
