Crude Oil Surges Past $100/Barrel Amid Middle East Tensions

Nigeria's struggling revenue profile is set to improve as Brent crude oil price surged above $100 a barrel for the first time in nearly two months. This sudden rise marks a significant increase of $36.42 per barrel compared to the projected oil price benchmark of $64.85.

The latest jump follows escalating attacks on commercial shipping in the Red Sea, which have deepened concerns that the Middle East supply crisis is spreading beyond the Strait of Hormuz. As of mid-morning Thursday, front-month Brent for September delivery was trading at $100.69 a barrel, up more than seven per cent on the day.

Nigeria's 2026 federal budget is anchored on an oil price benchmark of $64.85 per barrel and a daily crude oil production target of 1.84 million barrels per day. However, with Brent now above $100, Nigeria can expect a substantial increase in revenue. The rally has erased expectations of a quick return to normal oil flows, as repeated attacks on commercial shipping, renewed fighting involving Iran, and mounting export disruptions have taken their toll.

The physical market is tightening alongside futures, with governments around the world having drawn down hundreds of millions of barrels from strategic reserves since the Middle East conflict began. Commercial inventories have fallen sharply, and China has reduced imports by drawing on stockpiles accumulated before the war.