Nigeria Reaps Billions in Oil Windfall Amid US-Iran Conflict
The prolonged US-Iran conflict has significantly disrupted the global oil market, driving up crude prices and generating billions of naira in windfall profits for Nigeria over the past six months. While exact figures are not publicly available, Daily Trust estimates Nigeria may have earned approximately N5 trillion since the war began in late February 2026. At its peak, Brent crude, the international benchmark, surged above $115 per barrel in April following the killing of Iran’s Supreme Leader, Ayatollah Khamenei, in a joint US-Israeli airstrike.
The windfall, however, comes with mixed outcomes. Higher crude prices boost government revenues and foreign-exchange earnings but also raise fuel, transport, and food costs for households. The 2026 budget, initially set at N58.47 trillion with a conservative crude benchmark of $64.85 per barrel, was later revised to N67.7 trillion with an increased benchmark of $75 per barrel. With Brent crude averaging $97 per barrel over six months, Nigeria earned an extra $22 per barrel above projections, totaling an estimated $27.9 billion in additional revenue.
Despite the windfall, Nigeria’s crude production has lagged behind budget projections, averaging 1.6 million barrels per day instead of the targeted 1.8 million. This shortfall, along with existing crude swap arrangements, has limited the full benefit of the higher prices. Analysts note that while the windfall theoretically boosts revenues, production challenges and debt servicing mean the gains are not fully realized in cash terms. Additionally, the Excess Crude Account, meant to save surplus oil revenues, remains stagnant at $535,823.39, unchanged since August 2025.
Experts argue that the windfall presents an opportunity for Nigeria to increase revenue and support citizens facing higher living costs. However, they caution that rising crude prices also increase the cost of refined petroleum products, potentially offsetting some benefits. The failure to meet production targets further restricts the potential gains from the price surge. Without substantial improvements in production and savings mechanisms, the windfall may remain largely on paper rather than translating into tangible benefits for the population.