Nigeria, Oil Firms Record $4bn Windfall as Global Crude Prices Surge Amid Conflict

Nigeria and oil companies operating in the country have reportedly earned an estimated 4 billion dollars in additional revenue following a sharp rise in global crude oil prices triggered by the ongoing tensions involving the United States Israel and Iran.

The conflict, which began on February 28, has lasted over seven weeks, significantly influencing global oil markets. According to data analysed from the Central Bank of Nigeria, Nigeria Bonny Light crude averaged 70.14 dollars per barrel before the crisis. During the 52 day period of the conflict, the average price surged to 116.84 dollars per barrel, representing a 66.6 percent increase.

Further data from the Nigerian Upstream Petroleum Regulatory Commission showed that the country oil production rose to 1.546 million barrels per day in March from 1.483 million barrels per day in February.

At the pre crisis price level, the production volume over the 52 day period would have generated approximately 5.64 billion dollars. However, at the higher average price recorded during the conflict, total revenue rose to about 9.39 billion dollars. This resulted in an estimated windfall of 4 billion dollars for the government and oil firms.

Global oil prices remain volatile. Nigeria Bonny Light crude was priced at 98 dollars per barrel, up from 95 dollars, following the collapse of negotiations between the United States and Iran. Earlier, prices had dipped amid expectations of a possible agreement during talks in Islamabad.

Energy analysts warn that rising crude prices could have mixed effects on the domestic economy. Olatide Jeremiah noted that continued tensions and uncertainty are likely to push prices higher, with ripple effects across both upstream and downstream sectors, including increased petrol costs and transportation expenses.

Similarly, Colman Obasi of the Oil and Gas Services Providers Association of Nigeria stated that while higher energy costs could strain the economy, the impact may be moderated by local refining capacity, particularly operations at the Dangote Petroleum Refinery.