With Brent crude trading around $69 per barrel — above Nigeria’s 2026 federal budget benchmark of $64.8 — the ongoing oil price rally is expected to bolster government revenues, strengthen foreign exchange reserves and support exchange rate stability.
Analysts warn that a full-scale conflict capable of disrupting the Strait of Hormuz — a critical route for about 20 per cent of global oil shipments — could push Brent prices to as high as $91 or even $150 per barrel within weeks.
Rising geopolitical tensions in the Middle East, particularly involving Iran, have already driven oil prices higher for a third consecutive day. Brent crude futures climbed by 94 cents, or 1.4 per cent, to $69.34 per barrel, while U.S. West Texas Intermediate (WTI) rose by 1.5 per cent to $64.13 per barrel.
The rally comes as the Central Bank of Nigeria, under Governor Olayemi Cardoso, continues implementing key reforms that have helped stabilise the naira and improve external reserves.
At the official market, the naira appreciated to N1,396.99 per dollar on Thursday from N1,400.48 recorded on Wednesday, marking its first return below the N1,400/$1 threshold in over a year. Gains were also recorded at the parallel market, where the currency strengthened to N1,454/$, according to Cowry Asset Management Limited.
President of the Association of Bureaux De Change Operators of Nigeria, Aminu Gwadabe, noted that the naira has remained relatively stable in recent months following years of volatility.
Similarly, Managing Director of Financial Derivatives Company, Bismarck Rewane, estimated the fair value of the naira at about N1,257 per dollar, suggesting the currency remains undervalued by roughly 11 per cent based on purchasing power parity (PPP) analysis.
Nigeria’s external reserves have also risen steadily, increasing by $5.82 billion to $46.11 billion as of January 28, 2026, from $40.29 billion recorded in December 2024 — the highest level in about eight years. The reserve build-up is seen as strengthening import cover and enhancing currency stability.
Meanwhile, the Nigerian National Petroleum Company Limited reported a revenue increase to N5.08 trillion in October 2025 from N4.27 trillion in September, while profit after tax surged to N447 billion from N216 billion within the same period.
Analysts say continued reforms, rising capital inflows, improved oil prices and stronger reserve buffers could help Nigeria consolidate macroeconomic stability in the coming months, provided fiscal discipline is maintained.
