Nigerian Crude Soars in March as Bonny Light Commands Premium Amid Geopolitical Tensions

Nigerian crude oil marked its strongest monthly performance in March, climbing nearly 58% and approaching $120 per barrel at the start of the month. Bonny Light, Nigeria’s flagship light, sweet crude, began March trading around $70 per barrel and surged to an intraday high of $119.5—the highest level since June 2022. Market analysts attribute this surge to disruptions in the Strait of Hormuz, which intensified global energy uncertainties.

The escalating geopolitical tension created a risk premium for Nigerian crude, with European refiners urgently seeking light, sweet crude to replace Middle Eastern supplies. Bonny Light commanded a premium over Brent crude, trading between $112 and $122 per barrel as refineries competed to secure deliveries amid fears of a full energy blockade. This period highlighted Nigeria’s role as a strategic crude supplier on the global stage.

Domestically, Nigeria faces challenges balancing production and budget targets. The country struggles to meet its 2026 production goal of 1.84 million barrels per day, with current output averaging between 1.46 and 1.48 million barrels daily. Shortfalls of 16.6 million barrels in the first two months of 2026 have forced refiners like Dangote to adjust gantry prices frequently, pushing petrol costs in cities like Abuja to between N1,331 and N1,430 per liter.

Market fluctuations continued as crude prices softened from March’s highs. Reports suggesting a potential de-escalation in the Middle East conflict caused Nigerian crude to dip toward $102 per barrel, before partially recovering. Despite statements from U.S. leadership signaling a desire to end hostilities, analysts caution that infrastructure damage and ongoing regional instability could sustain supply shortages and elevated prices.

Global oil supply cuts have further reinforced the upward trend. OPEC output fell by 7.3 million barrels per day in March, while analysts raised annual price forecasts, predicting Brent crude could average $82.85 per barrel in 2026—30% higher than earlier projections. With energy prices remaining volatile, concerns about rising inflation and limited central bank flexibility are mounting, emphasizing the broader economic impact of Nigeria’s crude performance amid global geopolitical pressures.

source: nairametrics