The Nigerian Economic Summit Group (NESG) has projected that ongoing Middle East conflict could further raise crude oil prices higher with the possibility of Nigeria’s crude oil exports earnings increasing by as much as N30 trillion this year.
The group, in its report titled “Boom, Not Gloom” maintained that the escalating tensions from the U.S-Israeli attacks on Iran could usher in an era of “time-limited opportunity” for Nigeria and strengthen the country’s fiscal position if the Federal Government maintains fiscal discipline and avoid policy somersaults.
Specifically, the NESG anticipated that Nigeria’s potential fiscal gains from higher crude prices could range between about N2.3 trillion in a short-lived disruption to roughly N30.2 trillion under a prolonged global supply shock.
It clarified: “Nigeria’s geographic position as an Atlantic crude exporter provides a degree of insulation from disruptions in the Strait of Hormuz, one of the world’s most critical energy chokepoints. This means Nigeria can benefit from higher oil prices without facing the direct supply disruptions experienced by Gulf producers.
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“Under plausible scenarios, Nigeria could record additional oil revenues ranging from about N2.3 trillion under a short-lived shock to as much as N30 trillion if the conflict becomes prolonged. However, the upside is not guaranteed. Structural constraints in the oil sector, inflationary pressures from higher energy prices, and election-cycle spending pressures could limit the benefits if policy responses are poorly calibrated”, the NESG added.
It hinged its projections on three oil price scenarios, namely on the assumption that crude price could average around $90 per barrel if the disruption remains contained, rise to about $110 per barrel if tensions spread across the Gulf region, and climb as high as $130 per barrel under a prolonged geopolitical crisis affecting global energy markets.
The NESG predicted that under the most extreme scenario, the Federal Government’s share of the crude revenue windfall could cover Nigeria’s annual debt-service obligations or finance nearly 60% of the country’s capital expenditure with the attendant implication for easing fiscal pressures on the government.
But then, the economic think-tank group cautioned that Nigeria may not completely achieve the potential gains if crude production remains below budget projections.
Available data from the NUPRC indicated that Nigeria’s crude oil output has averaged about 1.48 million barrels per day this year, still lower than the 1.84 million barrels per day benchmark used in the 2026 budget.
It clarified that if the nation’s crude production remained unimproved the projected revenue gains from higher oil prices could be reduced by roughly 20%.
