Nigerian crude and other major contracts rose as efforts to resume peace talks over the Iran war stalled and the Strait of Hormuz remained virtually impassable, extending the disruptions in the Middle East that have shaken global markets.
Brent increased as much as 2.5 percent to $108 per barrel, while West Texas Intermediate moved toward $97.
Nigerian light sweet grades like Bonny Light, Qua Iboe, and Brass River have surged to over $113/bbl (and in some spot instances as high as $130per barrel).
The premium ($5 over Brent) is caused by Asian and European consumers shifting to West African light sweet crude due to supply disruptions in the Middle East, high demand for “sweet” crude with less sulfur, which refineries can more easily convert into high-value products like jet fuel and diesel.
However, crude oil lost some of its gains after Axios revealed Tehran had presented the US with a new plan to open the strait.
Iran declared that it will not participate in talks if it is threatened, and President Donald Trump cancelled his top envoys planned weekend visit to Pakistan, which is mediating talks.
Daily transits through the crucial waterway have decreased to nearly zero due to a blockade of the Strait of Hormuz by both the US and Iran, despite a ceasefire that has essentially been in place since early April. Fuel, natural gas, fertilizer, and crude supplies have all been cut off due to the supply shock, raising concerns about an inflation crisis.
Iran proposes deal to end war
Iran proposed to the US through Pakistani mediators a deal to reopen the Strait and end the war, with nuclear talks postponed for a later stage.
President Trump is scheduled to meet with his top foreign policy and national security team on Monday to discuss the impasse in the talks.
- Iran “offered a lot, but not enough,” the US president told reporters after telling his envoys Jared Kushner and Steve Witkoff to forego the trip to Pakistan on Saturday.
- Iran will not engage in “imposed negotiations under threats or blockade,” according to Iranian President Masoud Pezeshkian. Now in its ninth week, the Iran war has increased energy costs, caused shortages of essential goods like liquefied petroleum gas in India, and forced airlines to reduce flights.
The conflict is causing the largest supply shock in history, according to the International Energy Agency.
Nigeria boosts output yet faces tough trade-off between export earnings and domestic supply
Nigeria’s output increased, but it still needs to balance export earnings with domestic demands.
- Crude oil production reached about 1.84 million barrels per day (mbpd) in April 2026, a significant increase from the 1.3–1.5 million barrels per day recorded earlier in the year.
The nation is still struggling to maintain consistency with both its 1.5 mbpd OPEC quota (excluding condensates) and its 2026 budget benchmark of 1.84 million barrels per day.
But at the moment, there is a “crude supply gap.” Dangote refinery needs about 15 cargoes per month to operate at nameplate capacity, even though NNPC increased allocations to about 10 cargoes in March.
Despite Nigeria’s high domestic production, this forced the refinery to supplement with imports.
- Africa’s most populous economy is physically producing more oil than it has in years, but the main source of tension in the market right now is internal competition between the government’s need for USD export revenue and the needs of the Dangote Refinery.
Upstream producers in the Nigerian oil and gas industry are frequently reluctant to put domestic supply ahead of profitable international spot markets where they can make more than $113 per barrel in hard currency.
