Nigerian crude settled close to $68 per barrel as global oil markets remain on edge amid rising geopolitical tensions and economic uncertainties.
Oil prices jumped sharply following U.S. intelligence reports indicating that Israel may be preparing a military strike on Iranian nuclear facilities. Brent crude climbed past $66, while West Texas Intermediate (WTI) spiked by up to 5% before retreating.
Market sentiment turned increasingly bullish, suggesting Nigerian crude may continue to trend higher by Thursday. This optimism, however, is tempered by persistent volatility driven by contradictory signals from U.S.-Iran nuclear negotiations. Progress in these talks could unleash additional supply into an already oversupplied market, potentially depressing prices. Conversely, an Israeli strike would likely derail the negotiations and heighten instability in the Middle East—a region responsible for roughly a third of global crude supply, thereby sustaining a risk premium in oil prices.
CNN’s report on Israeli military plans briefly lifted safe-haven currencies like the Swiss franc and Japanese yen, though those gains quickly reversed. The U.S. Department of Defense and the National Security Council have yet to comment on the developments.
Israel has long debated striking Iran’s nuclear infrastructure. Central to the decision is whether any action could effectively disable Iran’s program. Past plans were reportedly stalled by President Joe Biden’s cautionary stance during earlier periods of heightened tension.
In parallel, OPEC and its allies plan to release additional oil from reserves, while U.S. shale output remains below peak levels. The ConocoPhillips CEO recently noted that shale growth is unsustainable with oil prices lingering around $50 per barrel.
Iran’s Supreme Leader, Ayatollah Ali Khamenei, reiterated this week that further talks with the U.S. are unlikely to yield substantive progress. Analysts suggesting WTI might fall to around $40—a level seen as favorable for lifting U.S. sanctions on Iran—may yet be validated.
Despite sanctions from Western nations, Iran has steadily increased exports. Goldman Sachs estimates Iranian crude production has risen by approximately one million barrels per day in recent years.
Nigerian Production Falls Short in 2025
Domestically, Nigeria faces a pressing challenge: a significant crude oil production deficit. Data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) reveals that only 200.08 million barrels were produced between January and April 2025, well below the 247.2 million barrel target. This represents an 18.7% shortfall.
Crude oil remains Nigeria’s primary source of foreign exchange and export earnings, leaving its economy highly exposed to both global price shifts and production setbacks. In response, the Nigerian government has introduced reforms targeting improved tax systems and foreign exchange unification, aiming to boost revenue from N6.8 trillion in 2023 to N12.4 trillion in 2024.
However, the World Bank has expressed concern that Nigeria’s 2025 budget is founded on overly optimistic revenue expectations. These fears are amplified by falling global oil prices since April and trade tensions triggered by former U.S. President Donald Trump’s announcement of reciprocal tariffs.
Further compounding the problem, Nigeria’s crude output declined by an estimated 46.4 million barrels in the first four months of 2025 alone a major risk to the feasibility of the current budget.
Credit: Nairametrics
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