Oil prices stayed above Nigeria’s 2026 budget benchmark of $64.85 per barrel on Monday, as markets reacted to supply disruptions and rising tensions in the Middle East.
Oil Prices Hold Steady
Early on Monday, Brent crude dipped by 7 cents to $65.81 per barrel, while U.S. West Texas Intermediate eased by 6 cents to $61.01 per barrel.
However, these small drops followed a strong rally last week, when both benchmarks climbed 2.7%, reaching their highest levels since mid-January.
U.S. Supply And Middle East Tensions
Meanwhile, U.S. producers faced severe weather in the Bakken shale, Texas, and Oklahoma, cutting output by roughly 250,000 barrels per day, according to JPMorgan.
Furthermore, geopolitical concerns pushed oil higher.
A U.S. carrier strike group arrived in the Middle East, raising fears of supply interruptions.
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Additionally, an Iranian official warned that any attack on its territory would trigger “an all-out war.”
Nigeria’s Fiscal Stakes
For Nigeria, oil revenue drives the national budget and fiscal planning.
The government set the 2026 budget assuming production of 2.6 million barrels per day and a benchmark price of $64.85 per barrel.
Falling below this price could strain revenue and disrupt government spending.
In addition, domestic production suffers from structural problems such as pipeline vandalism, oil theft, and inefficiencies.
These challenges often prevent Nigeria from reaching production targets, even when prices are strong.
Last year, Nigeria recorded a fiscal deficit of ₦13.51 trillion, surpassing targets and breaching the FRA 2007 deficit-to-GDP limit.
This figure highlights the importance of stable oil prices for government planning and revenue generation.
In conclusion, while current prices give some optimism, Nigeria must manage internal production hurdles and external market risks to secure long-term fiscal stability.
