Global oil prices have surged past $100 per barrel for the first time in over five years as the escalating conflict involving the United States, Israel and Iran disrupts supplies through the Strait of Hormuz.
The price of Brent crude has jumped to $109.18 per barrel, crossing the $100 mark for the first time in more than five years.
The sharp rise represents the biggest daily gain since the start of the COVID-19 pandemic in 2020 and about a 25 per cent increase within the past 24 hours.
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The surge intensified as the war involving the United States and Israel against Iran escalated, while traffic through the critical Strait of Hormuz slowed to a near halt amid attacks by Iranian forces on vessels attempting to pass through the channel.
The spike in oil prices is largely driven by global supply disruptions and could significantly boost Nigeria’s revenue as a major crude oil exporter.
Higher prices are also expected to strengthen the country’s Foreign Exchange (FX) reserves and support fiscal consolidation.
With Brent crude trading above $100 per barrel compared to Nigeria’s 2026 budget benchmark of $64.85, the federal government is likely to record substantial revenue gains.
However, the surge in global oil prices is already having ripple effects on Nigerians, despite the country being far removed from the conflict zone.
Within the past week, the Dangote Refinery and several filling stations across the country have adjusted petrol prices upward twice. Petrol that was selling at N870 and above per litre before the war broke out, is now selling at about N1,100 per litre across the country.
Analysts attribute this largely to Nigeria’s continued reliance on imported petroleum products.
By implication, the prices of goods and services may also rise as businesses adjust to higher energy costs, further deepening the economic pressure on households already grappling with the impact of ongoing economic reforms.
While the Nigerian government stands to benefit from increased oil earnings, many fuel marketers remain dependent on imported refined products.
“The global economy remains dependent on the concentrated flow of Mideast oil and natural gas through the Strait of Hormuz,” said Bruce Kasman, chief economist at JPMorgan.
“The near-term scenario is a near-term spike towards $120 bbl followed by moderation as the conflict soon subsides,” he told the Reuters news agency.
“But absent a clear and decisive political resolution, Brent crude oil prices are expected to settle at an elevated $80 bbl through mid-year.”
According to Mr Kasman, such an outcome could cut global economic growth by an annualised 0.6 per cent in the first half of the year and push consumer prices up by 1 per cent.
He warned that if the conflict widens and drags on, oil prices could surge past $120 per barrel, potentially tipping the global economy into recession.
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