$100 Oil Sparks Uncertainty for Global Markets
Nigeria's economy may be heading for an unexpected windfall due to higher oil prices caused by ongoing tensions between the US and Iran. The price of Brent crude has breached $100 a barrel, exceeding the $64.85 benchmark used in Nigeria's 2026 budget. This increase could lead to higher government revenues, but it also means that petrol prices have risen significantly, squeezing households, transport operators, and businesses.
According to the International Energy Agency (IEA), approximately 2.8 billion barrels of oil exports have been lost through the Strait of Hormuz since the US-Iran conflict began. The disruption has been one of the most significant shocks to global energy flows in modern history. However, alternative supply routes and inventory withdrawals have prevented a sustained price explosion.
The IEA now assumes that shipping through the Strait of Hormuz will remain restricted throughout 2026, with production levels expected to decline by 5.7 million barrels per day (b/d) year-on-year to 100.7 million b/d in 2026.