Nigeria Could Gain N30trn Oil Windfall Amid Middle East Tensions — NESG

The Nigerian Economic Summit Group (NESG) has projected that Nigeria could earn up to ₦30 trillion in additional oil revenue if global crude prices remain high due to escalating geopolitical tensions in the Middle East.

In a policy brief titled “Boom, Not Gloom,” the private sector policy advocacy group said the ongoing tensions involving the United States, Israel and Iran have pushed global oil prices upward, creating both opportunities and risks for oil-exporting nations.

According to the NESG, under a severe escalation scenario where crude oil prices average about $130 per barrel for six months, Nigeria could record a fiscal windfall of up to ₦30 trillion above the benchmark set in the 2026 national budget.

The group noted that such additional revenue could significantly strengthen the country’s fiscal position if managed prudently, providing more funds for public investments and helping the government reduce its debt burden.

The report also projected that stronger oil export earnings could boost foreign exchange inflows and raise Nigeria’s external reserves to around $57 billion, improving the country’s financial buffers and strengthening confidence in the foreign exchange market.

It added that higher oil revenue could support the naira by increasing dollar liquidity in the domestic market, which may help moderate exchange rate pressures and reduce imported inflation.

However, the NESG cautioned that the expected gains are not guaranteed due to persistent structural challenges in Nigeria’s oil sector, including lower-than-expected crude oil production, infrastructure constraints and ongoing crude theft.

The group pointed out that Nigeria’s oil output has recently remained well below the government’s benchmark of 1.84 million barrels per day, warning that this production gap could reduce the scale of any potential windfall.

In addition, the organisation warned that higher global energy prices could raise domestic fuel and transportation costs, which may increase inflationary pressures in the short term.

To maximise the benefits of the oil price surge, the NESG urged the Federal Government to adopt strict fiscal discipline by saving revenues above the budget benchmark rather than increasing spending, while also channeling part of the windfall into stabilisation and sovereign wealth funds and maintaining the removal of petrol subsidies.