The Nigeria Economic Summit Group, NESG, has projected that Nigeria could earn between N2.3 trillion and N30.2 trillion in additional oil revenues if the ongoing Middle East crisis continues to push global crude prices above the country’s 2026 budget benchmark.
NESG, in a policy brief released on Friday, said the escalation of tensions involving the United States, Israel and Iran since late February 2026 has triggered the most significant global energy shock since the Russia–Ukraine War, sending oil prices sharply higher.
According to the group, the surge in prices above the 2026 budget benchmark of $64.9 per barrel could provide Nigeria with a significant fiscal windfall, although the extent of the gains will depend on the duration of the conflict and domestic policy responses.
“Under plausible scenarios, Nigeria could record additional oil revenues ranging from about N2.3 trillion under a short-lived shock to as much as N30.2 trillion if the conflict becomes prolonged,” the NESG stated.
The economic think tank explained that the potential windfall would arise from the difference between the budget benchmark and higher global oil prices triggered by the geopolitical crisis.
Under a short-lived crisis scenario, lasting about four to six weeks with oil prices averaging $90 per barrel, Nigeria could earn about $1.62 billion, N2.27 trillion, in extra revenue.
If the conflict spreads across the Gulf region and lasts up to three months, with oil averaging $110 per barrel, the additional earnings could rise to about $7.48 billion, N10.47 trillion.
However, 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 additional revenue.
“In the most severe scenario, the Federal Government’s share alone—around N15.9 trillion—could cover annual debt-service obligations or finance about 60 per cent of the capital budget,” the report said.
The NESG noted that Nigeria’s status as an Atlantic oil exporter offers a strategic advantage during the crisis.
“The Strait of Hormuz, through which roughly one-fifth of global oil supply passes, sits at the centre of these tensions.
Nigeria, however, is structurally insulated from this chokepoint because its crude shipments leave the Gulf of Guinea without transiting Hormuz,” the group said.
It further explained that this allows Nigeria to benefit from higher global oil prices without suffering the direct supply disruptions affecting producers in the Gulf region.
Despite the potential fiscal gains, the NESG warned that higher global energy prices could raise domestic inflation through increased fuel, transport and logistics costs.
Model simulations by the group indicate that the oil shock could raise Nigeria’s headline inflation by between 1.3 and 5.2 percentage points over the next two to three quarters, depending on the severity of the crisis.
“Higher global oil prices could temporarily slow Nigeria’s disinflation process as fuel and transportation costs feed into broader consumer prices,” it noted.
However, the group said the inflation impact may be partly mitigated by increased domestic refining capacity, particularly the Dangote Refinery, which has reduced the country’s reliance on imported petroleum products.
The NESG also projected that stronger oil export receipts could boost foreign exchange inflows and support the naira.
Under contained crisis scenarios, additional FX inflows could push the exchange rate towards N1,200–N1,300 per dollar, while also enabling the Central Bank of Nigeria to strengthen external reserves.
“With sustained inflows, the Central Bank could accumulate additional reserves and stabilise the foreign exchange market,” the group said.
Despite the potential windfall, the NESG warned that Nigeria risks repeating its historical boom-and-bust cycle if policymakers fail to manage the gains prudently.
“The crisis presents Nigeria with both risks and opportunities. Policymakers must avoid the familiar pattern where oil windfalls translate into rapid spending expansions that weaken fiscal discipline and destabilise the macroeconomy,” it said.
The group advised the government to save excess oil revenues, maintain fuel subsidy reforms, reduce public debt and expand targeted social protection rather than resorting to broad price controls.
“If carefully managed, the crisis could consolidate Nigeria’s recent reform progress. Conversely, a weak policy response risks repeating the country’s historical boom-bust cycle,” the NESG warned.
