Nigerian crude climbs to $70 per barrel as global tensions intensify
Story by Martha Gwary
Nigeria’s crude oil prices have surged to around $70 per barrel, rising from $68 earlier in the week, driven by a decline in U.S. crude inventories and heightened geopolitical tensions.
Brent crude was trading at $69.30 per barrel on 26 September, marking a modest monthly gain of 3 per cent. Nigerian crude typically commands a slight premium over Brent due to its high quality — characterised by low sulphur content and a high yield of gasoline and diesel.
The country’s flagship Bonny Light blend, with an API gravity of 36° and a sulphur content of less than 0.2 per cent, remains one of the most sought-after crude grades globally. Its “sweet” and “light” profile makes it easier and more cost-effective to refine. Other premium Nigerian blends include Qua Iboe, Escravos, Brass River, Forcados and Agbami — all sourced from the Niger Delta. Nigeria, with proven reserves of 37.5 billion barrels, ranks as the world’s tenth-largest oil producer.
However, the nation’s fiscal outlook remains sensitive to oil price fluctuations. The 2025 budget is predicated on an average crude price of $75 per barrel and daily production of 2.6 million barrels — benchmarks that underscore Nigeria’s exposure to global market shifts.
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Global oil markets are facing renewed turbulence amid geopolitical strains. Russia has intensified export restrictions, extending a partial ban on diesel exports through the end of the year and reinstating a full ban on gasoline exports. The move has led to fuel shortages in some Russian regions and heightened concerns about supply disruptions.
At the same time, OPEC+’s gradual unwinding of production cuts has raised fears of oversupply, with global production expected to reach 105.8 million barrels per day (mb/d) by 2025 — a year-on-year increase of 2.7 mb/d. Non-OPEC+ producers are forecast to contribute an additional 1.4 mb/d to this total.
Nigeria surpassed its OPEC+ quota of 1.5 mb/d in June and July but now faces stiff competition from Kazakhstan, exporting a record 1.8 mb/d, alongside rising U.S. shipments. Prices are nearing the top of their two-month trading range amid concerns over potential U.S. action against Russia.
Meanwhile, a breakthrough agreement between oil companies in Iraqi Kurdistan, the Kurdish regional government, and Iraq’s central authorities is set to resume exports via the Iraq-Turkey pipeline — inactive since March 2023. Initial volumes of around 230,000 barrels per day are expected to restart imminently, although a previous attempt in March was unsuccessful.
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With ongoing conflicts in Europe and the Middle East further clouding the outlook, market uncertainty persists. While rising crude prices offer Nigeria a short-term fiscal boost, domestic fuel costs may climb as the country remains heavily dependent on imported refined products amid worsening economic pressures.
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