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.
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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.
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