KEY POINTS
- Oil prices remain above Nigeria’s $64.85 per barrel 2026 budget benchmark, supported by supply disruptions and Middle East tensions.
- U.S. production losses and heightened geopolitical risks are adding a premium to crude prices despite minor daily declines.
- While current prices support Nigeria’s budget assumptions, domestic production challenges and fiscal vulnerabilities persist.
Global oil prices held steady on Monday, remaining above Nigeria’s 2026 budget benchmark of $64.85 per barrel, as supply disruptions and rising geopolitical tensions in the Middle East continued to underpin the market.
Market data tracked by Reuters showed a modest pullback in early trading, following a strong rally in the previous session.
Brent crude oil futures slipped by 7 cents, or 0.1 per cent, to $65.81 per barrel at 02:21 GMT, while U.S. West Texas Intermediate (WTI) crude eased by 6 cents, or 0.1 per cent, to $61.01 per barrel.
The slight decline came after prices jumped by more than 2 per cent in the last trading session. Both benchmarks recorded weekly gains of about 2.7 per cent on Friday, closing at their highest levels since mid-January.
Supply Disruptions and Geopolitical Risks Lift Prices
Analysts attribute the resilience in crude oil prices to a combination of tight supply conditions and mounting geopolitical concerns.
JPMorgan disclosed that severe weather has cut around 250,000 barrels per day of U.S. crude output, affecting production in the Bakken shale, Oklahoma, and Texas.
At the same time, tensions in the Middle East have intensified following the deployment of a U.S. aircraft carrier strike group to the region. An Iranian official also warned that any attack on Iranian territory would be regarded as “an all-out war,” heightening fears of disruptions to key oil supply routes.
These developments have added a risk premium to oil prices, offsetting the impact of minor daily declines.
Nigeria’s 2026 budget is anchored on an oil price benchmark of $64.85 per barrel and a production target of 2.6 million barrels per day. With prices currently above this level, the government gains some breathing space in its revenue projections.
However, analysts caution that Nigeria’s heavy reliance on oil makes its fiscal position vulnerable to sudden price swings. Last week, crude prices briefly fell below the benchmark, raising concerns about possible revenue shortfalls.
