extended gains for a third straight day on Thursday as mounting fears of potential US military action against Iran; one of the Middle East’s top oil producers, sent Brent and WTI crude climbing to their highest levels since September 2025.
Brent crude rose by $0.94, or 1.4 per cent, to $69.34 per barrel by 07:30 GMT, while US West Texas Intermediate crude jumped 1.5 per cent to $64.13 per barrel, according to Reuters. Both benchmarks have gained roughly five per cent since Monday, reflecting heightened geopolitical risk premiums in the region.
“The main driver of oil prices remains geopolitical risk surrounding Iran and the Middle East,” said Suvro Sarkar, head of DBS Bank’s energy sector team. He added that unplanned outages in Kazakhstan and the impact of Winter Storm Fern in the US have also contributed to temporary price spikes.
Analysts warn that the threat of US–Iran conflict, coupled with ongoing restrictions on Russian oil imports and sustained demand from China, could keep oil markets tight, even as 2026 opened with expectations of a global oversupply.
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For Nigeria, the rally in Brent crude offers potential fiscal relief. At around $69 per barrel, crude prices are above the 2026 federal budget benchmark of $64.85, which could help boost government revenues and foreign exchange reserves. However, Nigeria’s current output of 1.5 to 1.6 million barrels per day, below its 2 million bpd capacity target, limits its ability to fully capitalize on supply disruptions in the Middle East.
Higher international oil prices are also being quickly transmitted to domestic fuel costs. On Thursday, the Nigerian National Petroleum Company adjusted petrol pump prices nationwide, following Dangote Refinery’s increase in gantry prices from N699 to N799 per litre. While this could raise government income, analysts caution that rising import costs, coupled with global shipping disruptions, could exacerbate inflation, projected at 37 per cent in 2026, and put additional pressure on the naira.
Some experts warn that a full-scale conflict affecting the Strait of Hormuz—a chokepoint handling about 20 per cent of global oil flows, could push Brent crude as high as $91 or even $150 per barrel, dramatically reshaping global markets.
In recent weeks, US President Donald Trump has escalated pressure on Iran over its nuclear programme, deploying naval forces to the region and hinting at possible strikes targeting Iranian security forces and leaders to provoke unrest. Iran, the fourth-largest OPEC producer with output of roughly 3.2 million barrels per day, remains a key driver of global oil stability.
For Nigeria, Africa’s largest oil producer, the combination of geopolitical tension, rising Brent prices, and constrained domestic output underscores both opportunity and risk as the country navigates fiscal planning, currency stability, and inflationary pressures in 2026.
