Nigeria Gains as Oil Prices Surge Past $105

Nigeria is set to benefit from rising foreign exchange inflows as global crude oil prices surged above $105 per barrel, far above the 2026 budget benchmark of $64.85.

Analysts warn that if Middle East tensions escalate and disrupt the Strait of Hormuz, prices could spike to $150 per barrel, delivering a major windfall for oil exporters like Nigeria.

The rally reflects geopolitical risks tied to U.S.–Iran tensions, sanctions on Russian oil, and supply disruptions in Kazakhstan and the U.S. Nigeria, which earns over 80% of government revenue from oil, stands to gain significantly.

The Central Bank of Nigeria (CBN), under Governor Olayemi Cardoso, has introduced reforms such as FX market unification and liquidity management, helping narrow the gap between official and parallel exchange rates.

Recent CBN data showed the naira strengthened to ₦1,396.99/$1, its first time below the ₦1,400/$1 mark in over a year. Foreign reserves also rose to $48.44bn, with projections of $51bn by year-end.

Cardoso noted that Nigeria’s current account balance jumped 85% to $5.28bn in Q2 2025, supported by oil output averaging 1.45–1.52 million barrels per day and non-oil exports growing 18% year-on-year.

Diaspora remittances increased by 12%, while reforms in subsidies, taxation, and banking recapitalisation are improving fiscal discipline.

“There will be no return to the practice of financing fiscal deficits by the Central Bank,” Cardoso stressed.

Experts say the combination of oil windfalls and structural reforms is reinforcing Nigeria’s resilience, though sustaining growth will depend on consistent policies, stronger productivity, and investor confidence.