Global oil prices remained firm on Monday, trading above Nigeria’s 2026 budget benchmark of $64.85 per barrel, as supply disruptions and rising geopolitical tensions in the Middle East continued to underpin the market. The steady pricing offers cautious relief for Nigeria’s oil-dependent economy, even as global uncertainties persist.
According to market data tracked by Reuters, Brent crude futures slipped marginally by 7 cents, or 0.1 per cent, to $65.81 per barrel, while U.S. West Texas Intermediate (WTI) crude eased by 6 cents to $61.01 per barrel as of early Monday trading. Despite the mild dip, prices remained elevated following a strong rally in the previous session.
Oil benchmarks had surged by more than 2 per cent in the last trading session, posting weekly gains of about 2.7 per cent and closing at their highest levels since mid-January. Analysts say the market continues to price in risks linked to tight supply and heightened geopolitical uncertainty, limiting downside pressure.
JPMorgan estimates that severe winter weather has cut about 250,000 barrels per day from U.S. crude production, affecting output in key regions such as the Bakken shale, Oklahoma, and Texas. At the same time, the deployment of a U.S. aircraft carrier strike group to the Middle East, alongside Iran’s warning of “all-out war” in the event of an attack, has raised fears of potential disruptions to major oil supply routes.
For Nigeria, sustained prices above the benchmark are critical. The 2026 budget is built on an oil price assumption of $64.85 per barrel and a production target of 2.6 million barrels per day. While current prices offer a temporary buffer, longstanding challenges—including oil theft, pipeline vandalism, and production inefficiencies—continue to pose risks to revenue projections and fiscal stability, especially after Nigeria’s fiscal deficit rose to ₦13.51 trillion in 2024.
source: nairametrics