Iran War: NESG Projects Up to N30.2trn Oil Windfall for Nigeria

The Nigerian Economic Summit Group (NESG) has projected that Nigeria could earn between N2.3 trillion and N30.2 trillion in additional oil revenue if the ongoing tensions in the Middle East continue to push global crude oil prices above the country’s 2026 budget benchmark.

In a policy brief released on Friday, the economic think tank said the escalating crisis involving the United States, Israel and Iran since late February 2026 has triggered one of the most significant global energy shocks since the Russia–Ukraine War, sending international oil prices sharply upward.

According to NESG, crude oil prices rising above the 2026 budget benchmark of $64.9 per barrel could result in a major fiscal windfall for Nigeria. However, the group noted that the magnitude of the gains will largely depend on the duration and scale of the conflict, as well as the government’s policy responses.

The report outlined three possible scenarios.

Under a short-lived crisis lasting four to six weeks, with oil prices averaging $90 per barrel, Nigeria could earn about $1.62 billion (approximately N2.27 trillion) in additional revenue.

If the conflict spreads across the Gulf region and lasts up to three months, with oil prices averaging $110 per barrel, the country’s additional earnings could increase to about $7.48 billion (N10.47 trillion).

In a worst-case scenario, where the crisis escalates globally and oil prices average $130 per barrel for six months, Nigeria could generate as much as $21.58 billion (N30.21 trillion) in extra oil revenue.

NESG added that in the most severe scenario, the Federal Government’s share—estimated at about N15.9 trillion—could be sufficient to cover Nigeria’s annual debt-servicing obligations or finance nearly 60 percent of the capital budget.

The group explained that Nigeria’s position as an Atlantic oil exporter provides a strategic advantage in the current crisis. Unlike producers in the Gulf region, Nigeria’s crude exports do not pass through the Strait of Hormuz, a critical shipping route that handles roughly one-fifth of global oil supply and sits at the centre of the tensions.

Because Nigerian crude shipments leave the Gulf of Guinea directly, the country can benefit from rising global prices without facing the immediate supply disruptions affecting Middle Eastern producers.

Despite the potential gains, NESG warned that higher global energy prices could also increase domestic inflation through rising fuel, transportation and logistics costs.

Its simulations suggest that the oil price shock could push Nigeria’s headline inflation up by between 1.3 and 5.2 percentage points over the next two to three quarters, depending on the intensity of the crisis.

However, the group said the inflationary impact may be partly cushioned by improved local refining capacity, particularly from the Dangote Refinery, which has reduced Nigeria’s reliance on imported petroleum products.

NESG also noted that stronger oil export receipts could boost foreign exchange inflows and support the naira. Under moderate crisis conditions, the exchange rate could strengthen toward N1,200–N1,300 per dollar, while allowing the Central Bank of Nigeria to rebuild external reserves.

Nevertheless, the think tank cautioned that Nigeria risks repeating its historic boom-and-bust cycle if the potential windfall is not carefully managed.

NESG advised the government to save excess oil revenues, sustain fuel subsidy reforms, reduce public debt and expand targeted social protection programmes, rather than resorting to excessive public spending or broad price controls.

According to the group, the crisis presents both risks and opportunities, warning that weak policy responses could undermine Nigeria’s recent economic reform efforts.