Nigerian crude oil prices climbed to a 10-day high due to escalating military exchanges between the United States and Iran. Crude Oil sinks further as Trump and Pezeshkian sign deal to end the Iran war, disrupting shipping through the Strait of Hormuz and pushing global oil prices higher.
Brent crude rose nearly 3 percent to trade above $90 per barrel as attacks on vessels intensified concerns about supply from the Middle East.
Nigeria’s light sweet crude grades, including Bonny Light, Qua Iboe and Forcados, traded around $93 per barrel, supported by strong demand from European refiners and the lower shipping risks associated with Atlantic Basin supplies.
The gains offer Nigeria an opportunity to earn more oil revenue and foreign exchange. However, the benefit will depend on the country’s ability to sustain production and export volumes.
Hormuz traffic falls as attacks intensify
Shipping activity through the Strait of Hormuz dropped sharply on Monday after several days of military exchanges between the US and Iran.
The waterway is one of the world’s most important energy transit routes, carrying crude oil and petroleum products from major Gulf producers to international markets.
Two vessels reportedly came under attack while attempting to pass through the strait, increasing concerns about the safety of commercial ships operating near Oman.
Some vessels switched off their transponders as they approached the waterway. This practice, commonly described as going dark, makes ships more difficult to track.
A Marshall Islands-flagged bulk carrier was among the few ships observed attempting to leave the Persian Gulf on Monday. Its transponder was reportedly switched off as it approached the strait.
An LPG carrier linked to vessels used for Iranian exports also appeared to be heading towards the waterway.
The sharp decline in traffic has raised fears that prolonged disruption could restrict global oil supplies and increase shipping and insurance costs.
US-Iran conflict raises supply concerns
The United States and Iran have exchanged attacks in an escalating cycle of retaliation.
The US Central Command said American forces carried out a ninth consecutive night of strikes against Iranian command facilities, maritime infrastructure, and missile and drone sites.
The US said the operations were intended to reduce Iran’s ability to attack commercial ships traveling through the Strait of Hormuz.
The death of a US service member in northern Iraq reportedly increased the number of American military deaths since the conflict began to 17.
US Secretary of State Marco Rubio said Iran had sent signals that it was interested in negotiations while continuing to carry out attacks.
He said the US would continue targeting Iranian assets used to threaten commercial vessels passing through the international waterway.
Kuwait also reported damage from retaliatory attacks. Kuwait Petroleum Corporation disclosed significant losses at an unnamed oil facility, which was evacuated after several people sustained injuries.
Two water and electricity facilities in Kuwait were also reportedly hit.
Nigerian crude gains advantage over Middle East supply
The disruption has increased the appeal of Nigerian crude among European refiners.
Nigeria’s crude grades travel directly through the Atlantic Ocean and avoid the Strait of Hormuz. This reduces exposure to the security risks and shipping delays affecting Middle Eastern oil.
Bonny Light, Qua Iboe and Forcados are also valued for their low sulphur content and relatively high product yield.
These qualities make the grades easier and cheaper for many refiners to process than heavier crude varieties.
European buyers are now paying stronger physical premiums for Nigerian barrels as they seek reliable alternatives to Middle Eastern supply.
The development could support Nigeria’s oil export earnings, particularly if the geopolitical crisis keeps global prices elevated.
Nigeria raises crude production to a six-year high
Nigeria’s oil production averaged 1.56 million barrels per day, according to figures from the Nigerian Upstream Petroleum Regulatory Commission.
The output represents the country’s highest crude production level since April 2020.
Total liquids production, including condensates, increased to about 1.74 million barrels per day after four consecutive months of growth.
Bonny remained Nigeria’s largest-producing terminal, with output of about 318,000 barrels per day. Forcados followed with approximately 306,000 barrels per day.
The production recovery reflects improved pipeline availability and stronger security around oil infrastructure.
Reduced crude theft and fewer disruptions have allowed producers to restore output from fields that previously operated below capacity.
Sustaining the increase will be important if Nigeria intends to benefit fully from the current rise in international oil prices.
Dangote refinery strengthens domestic crude demand
The expansion of the Dangote Petroleum Refinery has also changed Nigeria’s crude oil market.
The refinery reportedly purchased about 40.4 million barrels within 60 days from Nigerian grades, including Bonny Light, Forcados and Bonga.
This level of domestic demand provides Nigerian producers with another major buyer and reduces their dependence on international refiners.
It also creates a stronger price floor for local crude grades.
However, the refinery’s demand presents a policy challenge for regulators and producers.
Nigeria must balance domestic supply obligations with the opportunity to sell crude into the international market at attractive premiums.
Producers may prefer Atlantic Basin exports when foreign buyers offer higher prices, while the government wants local refineries to receive enough crude to maintain production.
Why this matters
The jump in Nigerian crude prices could improve government revenue, strengthen foreign exchange inflows, and provide additional support for the naira.
Nigeria’s 2026 budget assumptions depend heavily on oil production and price performance. A sustained increase above the benchmark price could reduce fiscal pressure and improve the country’s external reserves.
The stronger premium on Nigerian grades also shows the strategic value of the country’s Atlantic location during periods of disruption in the Middle East.
But the gains are not automatic.
Nigeria must maintain pipeline security, prevent production losses and ensure that operators can export more barrels while meeting domestic refinery demand.
The government must also manage the impact of higher international oil prices on local fuel costs.
Although Nigeria exports crude, it remains exposed to global petroleum-product prices. A prolonged increase in Brent could raise the cost of petrol, diesel, aviation fuel and other products.
How Market outlook depends on Hormuz security
Oil prices will remain sensitive to developments around the Strait of Hormuz.
A prolonged disruption could push prices higher, increase freight costs and strengthen demand for crude from outside the Middle East.
That scenario would favor Nigerian grades and other Atlantic Basin supplies.
However, a diplomatic settlement or restoration of normal shipping activity could reduce the geopolitical premium and pull prices lower.
For Nigeria, the immediate opportunity lies in combining higher prices with stronger production.
The country will earn the greatest benefit only if it can sustain output, meet domestic refinery needs and export enough crude while global buyers continue paying a premium.
