Oil Rally Boosted Nigeria’s Earnings In H1 – Afreximbank

Nigeria was among the African economies that benefited most from a strong rally in global oil prices during the first half of 2026, as the Afreximbank African Commodity Index (AACI) recorded a 6.7 per cent gain driven largely by energy markets, the African Export-Import Bank has said.

In its latest AACI report released in July 2026, Afreximbank said the Composite Index rose to 208.6 by end-June 2026, up from 195.5 at the end of December 2025, with the Energy sub-index posting the strongest performance among all categories, climbing 13.6 percent to 191.6.

The bank attributed the rally chiefly to heightened geopolitical tensions in the Middle East, particularly the conflict involving Iran and fears over possible disruptions to shipping through the Strait of Hormuz, which it said pushed Brent crude prices higher during the second quarter.

According to the report, Nigeria, alongside Angola, Libya and the Republic of Congo, was named among the net oil exporters that gained from improved export earnings, stronger fiscal revenues and better external balances on the back of firmer crude prices.

“Higher energy prices improved fiscal revenues and export earnings for oil-producing countries such as Nigeria, Angola, and Libya,” the report stated, noting that OPEC+ supply management and resilient global oil demand also helped sustain the price gains even after the immediate shock from the Iran-linked disruptions eased.

Beyond crude, Afreximbank said natural gas prices also remained firm through the first half of the year, supported by steady liquefied natural gas (LNG) demand in Asia and ongoing European import needs linked to energy security concerns stemming from the Middle East crisis.

However, the report cautioned that the gains from higher energy prices were not evenly spread across the continent. It said oil-importing countries such as Kenya, Morocco and Senegal faced higher import bills, rising transport and electricity costs, and renewed inflationary pressure — a reminder, it said, of Africa’s continued vulnerability to external shocks and its heavy reliance on imported refined petroleum products.

Afreximbank called for accelerated investment in domestic refining capacity, regional energy infrastructure and alternative energy sources to strengthen the continent’s long-term energy security, describing this as key to Africa’s “economic sovereignty.”

Other commodities mixed

While energy led the gains, other segments of the index showed a more mixed picture. The Base Metals sub-index rose 8.1 per cent to 261.6, driven by stronger copper, aluminium and zinc prices linked to demand from electrification, renewable energy and AI infrastructure projects. The Precious Metals sub-index eased 2.7 per cent to 378.8, even though gold prices stayed close to record highs on safe-haven demand and central bank buying. The Agriculture sub-index also declined 2.7 percent to 142.1, weighed down mainly by a correction in cocoa prices after their historic 2024–2025 rally, although cotton and coffee showed resilience.

Outlook

Looking ahead, Afreximbank projected that energy prices would ease somewhat in the second half of 2026 as rising supply from the United States, Brazil and Guyana offsets demand growth, though it warned that geopolitical risks — including potential shipping disruptions — would continue to drive volatility. The bank forecast a “bullish” outlook for crude-linked commodities like gold and coffee, while cotton was tagged “mildly bearish.”

Afreximbank recommended that African governments, including Nigeria, accelerate investment in processing and refining, diversify export markets, deepen intra-African trade under the African Continental Free Trade Area (AfCFTA), and explore commodity-linked financing to cushion economies against future price shocks.