Global crude market cools amid improved supply outlook, raising hopes for lower fuel prices but concerns over Nigeria’s revenue…..
Global oil prices took a sharp dip after former U.S. President Donald Trump announced a two-week ceasefire, easing geopolitical tensions that had rattled energy markets in recent weeks.
Nigeria’s flagship crude, Bonny Light, fell significantly dropping by 14.2 percent from $110 per barrel to $94.41. The decline mirrors a broader trend across international benchmarks, with Brent crude also slipping from around $100 to roughly $94 per barrel.
The market reaction was swift, driven by renewed confidence in global oil supply stability. Adding to the optimism, Iran signalled its willingness to ensure the safe passage of oil tankers through the critical Strait of Hormuz a chokepoint that had previously been at the centre of supply disruption fears.
Further calming the market, the United States reportedly relaxed sanctions on Iranian and Russian oil exports, a move seen as an attempt to stabilise prices after earlier spikes caused by prolonged shipping disruptions in the region.
At the same time, fresh data from the U.S. Energy Information Administration showed a notable increase in crude inventories. U.S. stockpiles rose by 3.1 million barrels, bringing total commercial reserves to 464.7 million barrels about two percent above the five-year average for this period.
However, the development presents a mixed outlook for Nigeria.
Nigeria’s 2026 budget is anchored on an oil price benchmark of $64.85 per barrel, with production projected at 1.84 million barrels per day and an exchange rate of ₦1,400 to the dollar. With current prices still well above that threshold, the immediate fiscal risk may be limited at least for now.
As global tensions ease and supply conditions improve, attention will shift to whether the price decline holds and how it ultimately reshapes both consumer costs and government revenues in oil-dependent economies like Nigeria.
