Oil Price Surges to $84 Per Barrel, Surpassing Nigeria’s 2026 Benchmark Amid Middle East Tensions

Crude oil prices soared on Thursday, reaching $84 per barrel, the highest level in 2026, well above Nigeria’s federal budget benchmark of $64.85 per barrel. Brent crude, the global benchmark, recorded a 12% rise in the first three days of the week, while West Texas Intermediate hovered near $78, signaling a sharp rebound in the energy market.

The surge comes amid intensifying conflict in the Middle East, as the US and Israel continue military operations against Iran, disrupting crude flows to key global importers. The Strait of Hormuz, a critical passage for oil tankers, is effectively blocked, leading to a bottleneck in supplies from Iran and other Persian Gulf producers. Some countries have already started curbing production to cope with the crisis.

China and India, two of the world’s largest oil importers, are responding to the disruptions by limiting fuel exports. Chinese refiners have been ordered to suspend diesel and gasoline shipments to meet domestic demand, while a major Indian processor announced export suspensions. Japan is also preparing to release oil from strategic reserves as local refiners seek emergency supply relief.

For Nigeria, the price surge brings both opportunities and challenges. Higher crude prices boost government revenue, offering relief despite the country producing below its OPEC quota. However, local fuel prices have risen sharply. Dangote Refinery increased its gantry price by N100 per litre, while the Nigerian National Petroleum Company Limited (NNPCL) raised pump prices to N960 per litre in Abuja, sparking similar adjustments by other fuel marketers.

Analysts warn that geopolitical tensions in the Middle East could push oil prices even higher. Priyanka Sachdeva of Phillip Nova Pte noted that additional strikes on tankers or infrastructure could trigger sharp spikes, while Goldman Sachs CEO David Solomon highlighted the uncertainty surrounding the conflict’s resolution. For Nigerian consumers, the ripple effects of these global events are already being felt at the petrol station.

source: Nairametrics