The Federal Government’s projected N19.5 trillion oil revenue target for 2025 is now within reach as global crude prices soar following rising tensions in the Middle East.
Brent crude futures jumped over 9 percent, hitting $75.15 per barrel — surpassing the government’s budget benchmark for the first time this year. West Texas Intermediate (WTI) also rose to $74, marking a 10 percent spike at its peak.
The surge followed a dramatic escalation in the region over the weekend, after Israel launched a preemptive strike on Iran, raising fears of a wider conflict and potential supply disruptions.
“This spike puts the Federal Government in a strong position to hit its N19.5 trillion oil revenue goal,” analysts at Afrinvest West Africa noted, adding that “a more prudent framework that prioritises sustainable budget growth is essential.”
The naira outlook also brightened, with markets reacting positively to oil breaching the $75 benchmark set in the 2025 budget.
Goldman Sachs raised its short-term crude forecast, projecting that “Brent could briefly rise above $90 if Iranian supply drops by 1.75 million barrels per day,” according to analyst Daan Struyven. However, he added that prices are expected to fall back to the $60 range by 2026.
Despite Iranian oil infrastructure remaining intact so far, traders are already pricing in risks of further escalation.
Afrinvest analysts advised the Federal Government to use the oil revenue surge to fund critical infrastructure and tackle insecurity. “With reduced subsidies on PMS, electricity, and FX, more resources should go toward productivity in agrarian communities,” they said.
They also emphasized the need to end crude oil theft and raise output to the target 2.06 million barrels per day. “Reducing the cost of governance, as advised by the World Bank, is now more important than ever,” they added.
While Israel has avoided key Iranian oil terminals and refineries, analysts warned that Tehran could retaliate by targeting Gulf infrastructure or closing the Strait of Hormuz — a critical oil transit route.
Some experts remain cautious. Spare production capacity from Saudi Arabia and the UAE, and increased U.S. shale output, could cushion short-term supply shocks. But for now, uncertainty looms large.
“The market remains volatile,” one trader noted. “Any further escalation could keep prices swinging sharply in the coming days.”
