Global oil prices were largely steady on Monday, holding above Nigeria’s 2026 budget benchmark of $64.85 per barrel, as supply disruptions and escalating geopolitical tensions in the Middle East continued to underpin the market.
Market data tracked by Reuters showed that the resilience in crude prices offers some short-term relief for Nigeria’s fiscal planning, even as underlying risks persist.
Early trading on Monday saw a mild pullback. Brent crude futures slipped by 7 cents, or 0.1 percent, to $65.81 per barrel as of 02:21 GMT, while US West Texas Intermediate (WTI) crude edged down by 6 cents, or 0.1 per cent, to $61.01 per barrel.
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The modest decline followed a strong rally in the previous session, when oil prices climbed by more than 2 percent. Both Brent and WTI ended last week with gains of about 2.7 percent, closing at their highest levels since mid-January.
Despite the slight dip, global oil markets remain supported by tight supply conditions and heightened geopolitical risks. Analysts point to a combination of production disruptions in the United States and rising tensions in the Middle East as key drivers sustaining prices.
According to JPMorgan, severe weather has disrupted around 250,000 barrels per day of US crude oil output, affecting production in major regions including the Bakken shale, Oklahoma and Texas.
For Nigeria, which relies heavily on crude oil revenues to fund government spending and support foreign exchange inflows, price stability above the budget benchmark is significant.
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The country’s 2026 federal budget is based on an oil price assumption of $64.85 per barrel and a production target of 2.6 million barrels per day.
These assumptions are central to Nigeria’s revenue projections and broader fiscal sustainability. However, concerns remain after prices briefly dipped below the benchmark last week, sparking worries about potential revenue shortfalls.
Beyond price movements, Nigeria continues to face structural challenges in its oil sector, including pipeline vandalism, crude theft and production inefficiencies.
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These issues have historically constrained output, often preventing the country from meeting production targets even during periods of strong oil prices.
While the current firmness in global crude prices provides a buffer for government finances, analysts caution that it does not fully offset the risks facing Nigeria’s oil-dependent economy. Sustained price support, improved security and operational efficiency will be critical to strengthening the country’s fiscal outlook.
