Nigeria has the potential to rake in additional oil revenue as global oil prices have reached levels over $100 per barrel for the first time in nearly two months on account of increased Middle Eastern tensions.
This is because Brent crude oil prices hit $100.69 per barrel yesterday, reaching its highest point of $101.01 while trading. The move follows increased threats to global oil supplies from increased attacks on commercial ships in the Red Sea.
The situation could be beneficial for Nigeria as its 2026 budget is pegged on an oil price benchmark of $64.85 per barrel and an expected oil production of 1.84 million barrels.
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The recent increase came in the wake of reports by the Houthis rebel group in Yemen, which claimed an attack on two oil tankers belonging to Saudi Arabia in the Bab el-Mandeb Strait, resulting in shipping companies deciding to divert their ships.
Oil prices have since increased by around 20 per cent in the last two weeks due to geopolitical instabilities impacting major supply routes. Other supply uncertainties include the effect of drone attacks on oil supply in Kazakhstan and the suspension of shipments of some Iraqi oil to Indian refineries due to security concerns.
The tightness in supply has also been exacerbated by dwindling global oil stocks and persistent constraints in Russian fuel supplies.
According to experts, the resurgence of Brent crude prices above $100 per barrel indicates uncertainties in the global energy market and is likely to greatly benefit oil-producing countries like Nigeria, as long as production is steady and exports improve.
