Nigerian crude grades and other major oil benchmarks climbed sharply as stalled peace efforts over the Iran war and the continued blockade of the Strait of Hormuz intensified disruptions across global energy markets.
Brent crude rose by as much as 2.5 percent to $108 per barrel, while West Texas Intermediate (WTI) approached $97. Nigerian light sweet grades — Bonny Light, Qua Iboe and Brass River — surged above $113 per barrel, with some spot cargoes reportedly trading as high as $130 per barrel.
Market analysts attribute the spike to strong demand from Asian and European refiners seeking alternatives to Middle Eastern supplies.
With flows through the Strait of Hormuz virtually halted, buyers have shifted toward West African light sweet crude, which contains less sulphur and is easier to refine into high-value products such as jet fuel and diesel.
The premium on Nigerian barrels, estimated at about $5 above Brent, reflects both supply scarcity and heightened appetite for sweeter crude blends.
However, crude prices trimmed some gains after Axios reported that Tehran had presented Washington with a fresh proposal aimed at reopening the Strait and de-escalating tensions.
Iran reportedly conveyed through Pakistani mediators a plan to end hostilities and reopen the waterway, with nuclear negotiations postponed to a later stage. But diplomatic efforts remain fragile.
Despite a ceasefire largely holding since early April, both the US and Iran have maintained a blockade of the Strait of Hormuz, reducing daily vessel transits through the strategic corridor to nearly zero.
The disruption has cut off flows of crude oil, liquefied natural gas and fertilizers, raising fears of a broader inflationary crisis.
For Nigeria, the crisis has created a paradox. While global prices are surging, domestic supply tensions persist.
Nigeria’s crude oil production climbed to about 1.84 million barrels per day (mbpd) in April 2026, up significantly from the 1.3–1.5 mbpd recorded earlier in the year.
The output level aligns with the country’s 2026 budget benchmark of 1.84 mbpd but remains above its 1.5 mbpd quota under the OPEC framework, excluding condensates.
Yet, despite higher production, a “crude supply gap” remains in the domestic market.
Energy economist Dr. Femi Adeyemi said Nigeria is benefiting from higher prices but faces internal structural challenges.
“Producers are incentivised to sell into international spot markets where they can earn over $113 per barrel in hard currency. That creates tension between export revenue goals and domestic refining needs,” he explained.
According to him, the government must strike a balance between boosting foreign exchange earnings and ensuring adequate feedstock for local refining capacity.
Similarly, oil and gas analyst Chioma Eze noted that the global supply shock has amplified Nigeria’s strategic importance.
“With Middle Eastern flows disrupted, West African grades have become premium barrels. But unless domestic supply obligations are strictly enforced, local refiners like Dangote will continue to struggle,” she said.