Nigeria could record an additional N6.8 trillion in oil revenue in 2026 as rising crude prices driven by the ongoing US-Iran conflict strengthen the country’s fiscal outlook.
This is according to BMI, a unit of Fitch Solutions, in its latest Sub-Saharan Africa market assessment for April, which also raised Nigeria’s 2026 growth forecast.
The report highlights how higher global oil prices, alongside ongoing domestic reforms, are expected to support government revenues and improve macroeconomic stability despite lingering inflationary pressures.
What the BMI is saying
BMI estimates that Nigeria’s fiscal position will benefit significantly from higher oil prices, with Brent crude now projected to average $78 per barrel in 2026.
- “Higher Brent crude prices, now expected to average USD78.0/bbl versus USD67.0/bbl pre-conflict, should deliver a fiscal windfall of about NGN6.8trn, or just over 1% of GDP”.
- Nigeria’s real GDP growth forecast for 2026 was increased from 4.3% to 4.4%.
- Petrol prices in Nigeria have risen by over 50% since the escalation of the Middle East conflict.
BMI noted that Nigeria is less exposed to the economic disruptions from the conflict compared to other Sub-Saharan African economies, supporting its improved growth outlook.
More insights
The improved fiscal outlook is closely linked to structural reforms in Nigeria’s oil sector, particularly the removal of the fuel subsidy, which has allowed domestic prices to reflect global market conditions.
- “The removal of the longstanding fuel subsidy now means that domestic prices are exposed to international benchmarks”
- Higher oil prices are directly translating into increased earnings for the government.
- The pass-through of global prices has led to higher domestic fuel costs.
- A relatively stronger naira is helping to moderate imported inflation pressures.
BMI added that while fuel price increases have raised concerns about inflation, the impact is expected to be temporary and manageable under current macroeconomic conditions.
What you should know
Earlier, the Nigerian Economic Summit Group (NESG) projected that escalating geopolitical tensions in the Middle East could deliver a massive oil revenue windfall to Nigeria, potentially reaching as high as N30.2 trillion if the conflict between Iran and Israel becomes prolonged.
Nairametrics reports that oil prices surged on Thursday as Iran intensified attacks on oil and transport facilities across the Middle East.
Nairametrics previously reported that security, economic, and policy analysts said the ongoing Iran–Israel–US conflict has exposed significant weaknesses in Nigeria’s ability to anticipate, absorb, and respond to external shocks, warning that the country’s crisis-response “toolkits” are no longer adequate for today’s increasingly interconnected global risks.
- After 39 days of war, the U.S. and Iran agreed to a two-week ceasefire brokered with the help of Pakistan, with support from China.
- The conflict has already caused significant global disruptions, particularly in energy markets.
