The ongoing tensions between the United States and Iran over the reopening of the Strait of Hormuz have pushed global oil prices higher, with Brent crude rising by about five per cent to $87 per barrel from $83.
The development could provide a boost to Nigeria’s oil revenue, as the current international price is significantly above the benchmark used in the country’s 2026 budget.
Oil Price Rises Amid Hormuz Dispute
The latest increase comes as uncertainty continues over the reopening of the Strait of Hormuz, a major global route for oil shipments.
Bank of America has warned that oil prices could climb further if the disagreement between Washington and Tehran persists, particularly as the winter season approaches.
Francisco Blanch, Bank of America’s head of commodities and derivatives research, said oil prices could continue moving higher if an agreement is not reached.
“But if we don’t, we’re going to keep creeping higher into the winter,” Blanch told CNBC.
He noted that only a limited number of ships are currently able to pass through the strategic waterway, compared with about 140 vessels that previously moved through the route.
Nigeria Could Gain $22.15 Per Barrel
The rise in crude prices is favourable for Nigeria because the 2026 federal budget was based on an oil benchmark of $64.85 per barrel.
With Brent crude now at $87, Nigeria’s oil price is about $22.15 above the budget benchmark.
The 2026 budget was also based on crude production of 1.84 million barrels per day and an exchange rate of N1,400 to the dollar.
However, higher global crude prices have not yet translated into a clear increase in domestic petrol and diesel prices.
Petrol Prices Record Mixed Movements
Prices of Premium Motor Spirit (PMS), popularly known as petrol, and Automotive Gas Oil (AGO), or diesel, recorded mixed movements across major petroleum markets in Nigeria.
In Lagos, some depots recorded marginal reductions in petrol prices.
African Terminal reduced its price by N4 per litre to N1,165, while Aiteo lowered its price to N1,165 from N1,168.
NIPCO also reduced its depot price by N2 to N1,166 per litre.
Meanwhile, Dangote and Pinnacle maintained their prices at N1,166 per litre.
Other marketers recorded significantly higher prices, with GulfTreasure and Duport listed at N1,550 per litre, while Rain Oil was listed at N1,580.
The varying prices highlight continued volatility in Nigeria’s downstream petroleum market, where costs differ depending on supply conditions, location and individual depot pricing.
For motorists and other consumers, sustained increases in depot prices could eventually put additional pressure on pump prices in affected areas.
