Nigerian crude oil has climbed above $70 per barrel, exceeding the Federal Government’s 2026 budget benchmark of $64.85. Latest market data shows Bonny Light trading at around $71, a slight dip from Monday’s $72.3. Known for its “light and sweet” characteristics, Nigerian crude remains highly desirable due to its low sulfur content and high API gravity, making it cheaper to refine into diesel, gasoline, and other high-value products.
Global oil prices are being pushed higher by rising geopolitical risk premiums. The Red Sea region has seen a heightened U.S. military presence ahead of the third round of U.S.-Iran nuclear talks in Geneva. Ongoing Iranian naval exercises in the Strait of Hormuz, a critical route for roughly 20 million barrels of oil daily, have further intensified concerns over potential supply disruptions, adding upward pressure on crude prices.
Despite short-term gains, the market faces medium-term uncertainty. The U.S. Energy Information Administration (EIA) forecasts global oil inventories to rise by 3.1 million barrels per day in 2026, outpacing consumption. Additionally, potential U.S. national security tariffs on imports have reignited trade concerns, introducing questions about global growth and future energy demand. Nigerian crude has responded with a modest pullback as traders balance geopolitical risks against these supply-demand dynamics.
Nigeria’s oil outlook is bolstered by recent infrastructure developments, including the Dangote Refinery, now operating above its designed capacity of 650,000 barrels per day. This facility has allowed Nigeria to become self-sufficient in Premium Motor Spirit (PMS), supplying 60–65 million liters daily and exporting 20 million liters of surplus fuel. The introduction of new crude grades, including Cawthorne, Utapate, and Obodo, further strengthens Nigeria’s position in global markets.
Crude theft and pipeline vandalism, which cost Nigeria billions in 2025, have declined thanks to new security measures and community monitoring programs. The federal government has also launched a new licensing round for 50 oil and gas blocks, aiming to attract over $10 billion in investments for untapped reserves. These initiatives position Nigeria to capitalize on rising crude prices while strengthening domestic production and refining capacity.
source: nairametrics