Nigeria could receive a significant boost to government revenue after international crude oil prices climbed above US$100 per barrel for the first time in nearly two months, widening the gap between current market prices and the oil benchmark used to prepare the country’s 2026 budget.

Brent crude, Nigeria’s main pricing benchmark, rose to US$100.69 per barrel on Thursday, briefly touching US$101.01, as escalating attacks on commercial shipping in the Red Sea intensified concerns that disruptions to global oil supplies are spreading beyond the Strait of Hormuz.

The rally places Brent about US$36 above Nigeria’s 2026 budget benchmark of US$64.85 per barrel, potentially increasing oil revenue if the higher prices are sustained and the country is able to maintain production.

For an economy where crude oil still provides a substantial share of export earnings and government income, every sustained increase in international oil prices creates additional fiscal space. Higher oil prices could improve federally collected revenue, strengthen foreign exchange inflows and ease pressure on public finances, particularly as the government continues implementing economic reforms. However, higher prices alone will not guarantee larger earnings.

Nigeria’s 2026 budget is also based on an ambitious production target of 1.84 million barrels per day, meaning the country can only fully benefit from the price rally if it consistently produces enough crude to take advantage of stronger market conditions.

The latest price surge reflects growing fears over global supply disruptions rather than stronger demand.

Oil markets have been unsettled after Yemen’s Houthi rebels claimed responsibility for attacks on Saudi oil tankers in the Bab el-Mandeb Strait, prompting some commercial vessels to alter routes or delay shipments through one of the world’s busiest energy corridors.

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The Red Sea tensions have compounded existing concerns surrounding the Strait of Hormuz, another critical route through which a significant share of the world’s oil exports passes. Together, the disruptions have heightened fears that supplies from the Middle East could remain constrained for longer than previously expected.

Supply pressures are also emerging elsewhere.

Kazakhstan has reduced crude production after drone attacks disrupted operations at the Caspian Pipeline Consortium export terminal, while Indian state refiners have reportedly suspended Iraqi crude purchases because of shipping risks through the Gulf. Russian fuel exports also remain constrained following repeated attacks on refining infrastructure.

Those developments have tightened the physical oil market at a time when global inventories are already under pressure.

Many governments have drawn heavily from their strategic petroleum reserves since geopolitical tensions intensified in the Middle East, while commercial stockpiles have continued to decline. China has also reduced imports by relying more heavily on previously accumulated reserves, further reducing the cushion available to absorb future supply shocks.

The latest rally marks a sharp reversal from earlier expectations that tensions in the Middle East would gradually ease following diplomatic efforts between the United States and Iran. Instead, the conflict has expanded beyond the Strait of Hormuz into the Red Sea, placing two of the world’s most important oil shipping routes under simultaneous pressure and pushing crude prices back into triple-digit territory.

For Nigeria, the development presents an economic opportunity but also a familiar reminder. Stronger oil prices can improve government revenue, but lasting gains will ultimately depend on increasing production, reducing crude theft and attracting the investment needed to sustain output over the long term.

Meiza Nigeria