Oil
Middle East crisis could fetch Nigeria N30tn oil windfall, says NESG
Nigeria stands to gain as much as N30 trillion in additional oil revenue if the ongoing conflict in the Middle East pushes global crude prices to around $130 per barrel, the Nigerian Economic Summit Group (NESG) has projected.
In a new policy brief titled “Boom, Not Gloom,” the think-tank stated that the escalating tensions involving the United States, Israel, and Iran present a “time-limited opportunity” for President Bola Tinubu’s administration to secure its largest fiscal windfall in years.
However, it warned that the prospect also carries significant political and policy risks as the country approaches the 2027 general elections.
According to the report, fiscal windfalls could range from N2.3 trillion in a short-lived crisis scenario to as much as N30.2 trillion under a protracted disruption.
The group noted that Brent crude is currently trading at approximately $99.80 per barrel, well above the $64.9 per barrel benchmark in Nigeria’s 2026 budget. This price gap, it said, could help finance the country’s over N25 trillion fiscal deficit.
NESG projected three possible price trajectories: an average of $90 per barrel if the disruption remains contained; $110 if the conflict spreads across the Gulf region; and $130 in the event of a prolonged global shock.
Under the most extreme scenario, the federal government’s share of the windfall could cover annual debt-service obligations or fund about 60 per cent of the capital budget.
However, the group cautioned that the gains are not guaranteed. Nigeria’s oil output has averaged about 1.48 million barrels per day this year, significantly below the 1.84 million barrels per day projected in the national budget.
The NESG warned that if production does not improve, the anticipated gains could shrink by approximately 20 per cent.
Beyond production challenges, the report identified the 2027 election cycle as a key domestic risk.
The NESG warned that political pressure to ramp up spending or reintroduce petrol subsidies could undermine recent economic reforms.
It urged the government to firmly resist any push to bring back fuel subsidies, arguing that doing so during an oil rally could recreate distortions that historically eroded the benefits of higher crude prices.
The group further warned that rising oil prices could still impact domestic costs, estimating that the shock could add between 1.3 and 5.2 percentage points to inflation over the coming quarters, depending on how long crude prices remain elevated.
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