Nigeria’s oil earnings have recorded an estimated windfall of about N5.13tn in two months, as crude prices surged sharply following tensions linked to the United States–Iran crisis, pushing revenues far above the Federal Government’s 2026 budget assumptions.

The US-Iran war started on February 28 when oil prices were below $70 a barrel.

Since the war started, oil prices have continued to soar, selling for above $120 at some point. As of Friday, Brent traded at $110 per barrel, and Bonny Light, Nigeria’s flagship crude, traded at $134 as of Thursday.

The 2026 budget Is anchored on daily oil production of 1.8 million barrels per day, a benchmark oil price of $64.85 per barrel and an exchange rate of N1,400 to the dollar.

Based on these, expected daily oil revenue stands at $116.73m, derived from multiplying 1.8 million barrels by $64.85. When converted at the budget exchange rate, this amounts to about N163.42bn per day, which serves as the baseline for measuring any revenue gains or shortfalls.

Findings, however, show that actual earnings in March and April exceeded this benchmark, largely due to a sharp rise in crude oil prices as the crisis in the Middle East rages on.

In March, data from the Nigerian Upstream Petroleum Regulatory Commission indicated that Nigeria’s oil production averaged 1.55 million barrels per day, while the average crude price stood at $95.03 per barrel, according to the Central Bank of Nigeria, and the exchange rate averaged N1,370 to the dollar.

Using these figures, daily revenue amounted to approximately $147.30m, obtained by multiplying 1.55 million barrels by $95.03.

Converted at the average exchange rate for the month, this translates to about N201.80bn per day.

A comparison with the budget benchmark of N163.42bn per day shows a positive variance of N38.38bn daily. Over the 31 days in March, this translates to an estimated windfall of N1.19tn.

Despite production falling short of the budget target by about 250,000 barrels per day, the higher oil price ensured that overall revenue remained significantly above projections.

The gains became more pronounced in April, when both production and prices increased. Oil output is expected to rise to a conservative average of 1.7 million barrels per day (based on claims by the NUPRC that oil production had surged to 1.8 mbpd), while the average price surged to $127.05 per barrel. The exchange rate for the month was approximately N1,365 to the dollar.

Based on these parameters, daily oil revenue climbed to about $216.0m, calculated by multiplying 1.7 million barrels by $127.05. When converted to naira, this yields approximately N294.84bn per day.

Compared to the budget benchmark, this represents a daily windfall of N131.42bn.

Over the 30 days in April, the total windfall is estimated at about N3.94tn. The sharp increase reflects the combined effect of improved production and a significant spike in global oil prices during the period.

When aggregated, the windfall from both months amounts to about N5.13tn, with March contributing N1.19tn and April accounting for N3.94tn.

The analysis Indicates that the surge in oil prices was the dominant factor driving the increase in revenue, as opposed to production growth.

In March, output remained well below the budget benchmark, yet earnings still exceeded projections due to stronger prices.

Though production reportedly improved in April, the scale of the windfall was largely driven by the exceptional surge in crude prices.

The development points to a temporary boost in government revenues and could provide some fiscal relief in the short term.

However, it also highlights the country’s continued vulnerability to volatility in global oil markets, as revenue performance remains heavily dependent on external price movements rather than stable domestic production levels.

Further analysis shows that without the price surge, revenues in both months would have been significantly lower, even with the same production levels and exchange rates.

If March crude had been sold at the budget benchmark of $64.85 per barrel, daily revenue would have been about $100.52m, derived from multiplying 1.55 million barrels by the benchmark price. Converted at N1,370, this amounts to N137.71bn per day, translating to about N4.27tn for the 31-day period.

A similar trend is observed in April. At a production level of 1.7 million barrels per day and the benchmark price of $64.85, daily revenue would have stood at about $110.25m.

Converted at the average exchange rate of N1,365, this gives N150.50bn per day, amounting to approximately N4.52tn for the month.

While the country makes more revenue from oil sales, the masses are at the receiving end as fuel prices continue to rise alongside the crude rates.

The Nigerian National Petroleum Company Limited recently raised the official selling prices of all 37 Nigerian crude grades for May-loading cargoes, according to a report by Oilprice.com.

The report stated that Nigeria was reaping the benefits of the US-Iran war, as the NNPC increased the price of its flagship grade, Bonny Light, by $6.13 per barrel for May compared to April. Similarly, Forcados was also raised by $7.01 per barrel.

“Nigeria reaps the benefits of the Iran war. Nigeria’s national oil company NNPC has raised the official selling prices of all 37 Nigerian crude grades for May-loading cargoes, hiking its flagship grade Bonny Light by a whopping $6.13 per barrel compared to April, while Forcados is up by $7.01 per barrel,” the report stated.

Petrol responded immediately as the Dangote Petroleum Refinery raised the gantry price to N1,275 per litre, up from N1,200 on Wednesday.

Filling stations did not hesitate to move up their pump prices from an average of N1,250 to about N1,350 or N1,400, depending on the location.

Calls for relief

Speaking with Sunday PUNCH, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, said he regretted that the Federal Government was not taking steps to support the masses despite making more gains from the high oil prices.

He said, “The government is not making any statements about the rising petrol prices, so it’s worrisome. At least, the government could come up with some measures. We are making some gains now on the price of crude oil. The government can give some back to reduce the cost of transportation so that food will not be expensive, along with a few other things. That’s what we have advised.”

The PETROAN boss said the price of petrol could go above N1,500 per litre if the Middle East crisis is not de-escalated.

“If you go back to our predictions, I stated it there because Mr Trump is not very clear as to what he wants, in my opinion; if it is to decimate the Iranian nuclear facility or if it is to take over the crude oil as they are taking over Venezuela’s. I don’t think we know what he wants exactly. So we are not sure we are seeing the end of that crisis,” he said.

Energy economists called for targeted cash transfers to cushion the impact of rising fuel prices on vulnerable Nigerians as the government makes more revenue from oil.

A former president of the Nigerian Association for Energy Economics, Professor Adeola Adenikinju, said the current situation presents a “two-edged sword” for Nigeria, with potential revenue gains from higher oil prices on one hand and worsening economic hardship for citizens on the other.

According to him, rising petrol costs have triggered increases in transportation fares and inflation, placing additional pressure on low-income households.

“This is the time that Nigeria should say, ‘Look, we are sending some cash to those poor people who are vulnerable,” he said, stressing the need for direct intervention to support the most affected.

He, however, noted that the absence of a reliable database of vulnerable Nigerians remains a major constraint to implementing effective cash transfer programmes.

“If we have the data of all the poor people, this is the time that Nigeria should send some cash to those who are vulnerable, but we don’t have the data,” he added.

Adenikinju said while recent moves to increase allowances for civil servants may provide limited relief, such measures would exclude a large segment of Nigerians working in the private and informal sectors.

He, therefore, urged both federal and state governments to collaborate in designing broader support mechanisms based on that windfall.

Refiners seek domestic crude pricing

In their reactions to the rising oil prices due to the US-Iran war, local refiners urged the Federal Government to drop the use of international pricing benchmarks for crude supplied to domestic plants, saying the current structure inflates costs and undermines local refining.

The spokesperson for the Crude Oil Refiners Association of Nigeria, Eche Idoko, said in an interview that the association had consistently pushed for a domestic pricing arrangement that reflects Nigeria’s peculiarities.

According to Idoko, crude supplied to local refineries should be priced based on locally designed pricing instead of using Brent as a benchmark.

“If you are using Brent to benchmark our pricing, the factors that are affecting the Brent pricing will still affect the price at which you are landing crude here. What we have always insisted on is that those elements in Brent that do not apply to the trade between the local refinery and the oil producers should be discounted. And like that, you get the actual cost of crude for local refineries,” he said.

An economist, Bismarck Rewane, also advised, “One of the options that can be explored is that the Federal Government of Nigeria agrees to sell crude at a particular price to the Dangote refinery with the assurance that the price of refined products does not increase.”

Meanwhile, the N5.13tn windfall reflects the impact of the US–Iran conflict-driven rally in global crude prices on Nigeria’s oil earnings, pushing revenues well above the 2026 budget benchmark. However, the gains remain largely price-driven and external, rather than a result of sustained production growth.

This indicates that a crash in global oil prices would result in a sharp drop in the country’s oil revenue.

The development shows both the immediate fiscal boost and the continued vulnerability of Nigeria’s revenue base to fluctuations in the international oil market. It also highlights the double-edged impact of rising global oil prices, boosting government earnings while simultaneously increasing fuel costs and inflationary pressures on consumers. (Sunday PUNCH)

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