Nigeria Faces N13Trn Revenue Risk as Strait of Hormuz Reopens

Nigeria faces a potential revenue shock of up to N13 trillion in the remaining months of 2026 as the reopening of the Strait of Hormuz following a ceasefire between the United States, Israel, and Iran threatens to push crude oil prices back toward the country’s 2026 budget benchmark of $64.85 per barrel, after windfall earnings generated by the Hormuz blockade.

The Sun newspaper reported on Monday that Nigeria earned an estimated windfall of approximately N5.13 trillion in the two months between February and April 2026, when the Hormuz disruption drove crude prices to a peak of over $120 per barrel, far above the government’s budget assumptions. Brent crude is now trading toward the $75 to $82 range following the ceasefire, and analysts project that the normalisation of Middle East supply could push prices toward the budget benchmark within weeks.

Windfall Revenue Now at Risk

At $64.85 per barrel compared to the $95 crisis-period level, Nigeria would generate significantly less daily federation revenue from its oil production of approximately 1.55 million barrels per day. BusinessDay’s analysis showed that the differential between crisis-level prices and budget benchmark prices could translate into a shortfall of N13 trillion in oil revenue for the rest of the year if global prices fall sharply and quickly.

The windfall period also exposed weaknesses in Nigeria’s energy reform programme. Between October 2024 and October 2025, data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority showed the Dangote Refinery averaging only 51.5 per cent of its projected daily output of 35 million litres due to NNPC’s chronic underdelivery of crude under the naira-for-crude arrangement.

Naira-for-Crude Buffer Provided Partial Protection

However, government officials argued that the naira-for-crude initiative prevented the domestic fuel scarcity that afflicted many other countries during the Hormuz disruption, buffering Nigerian consumers from the worst supply effects even as pump prices rose. By March 2026, Nigeria had already become a net exporter of refined petrol, shipping approximately 44,000 barrels per day abroad. Consequently, while the revenue windfall may be short-lived, the structural progress in domestic refining means Nigeria’s long-term energy exposure to global supply shocks is meaningfully lower than it was before the Dangote Refinery came online.