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Nigeria’s oil sells at about $92 a barrel, $14 higher than FG budget benchmark

Nigerian crude maintained its premium status as investors and sold higher than the FG budget benchmark on oil as oil traders eyed concerns around crude and fuel supplies, following Ukrainian attacks on Russian refineries and the potential for a widening of the Israel-Hamas war to more directly including Iran.

Nigeria Brass River and Qua Iboe traded close to $92 a barrel while Brent Crude at the time of writing traded at $89 per barrel. Nigeria Bonny Light also traded at $91.37 a barrel late Tuesday.

Nigeria recorded extra revenue of $13.71 per barrel at the current price of $91.67 per barrel, while the country’s 2024 budget was based on $77.96 per barrel and 1.78 million barrels per day.

Although efforts to combat oil theft have intensified, Africa’s largest economy needs to be able to fulfil its budgetary targets of 1.78 million barrels per day.

Additionally, with numerous refineries set to come online this year, worries regarding the supply of feedstock for the refineries have grown over the past month.

After a drone strike by Ukraine on a second Russian refinery raised the possibility of shutting down even more of the nation’s processing capacity and reducing the production of gasoline and diesel fuel, prices shot up. Russia is one of the biggest and one of the top three producers of oil in the world.

The United States is the largest oil consumer in the world, and early signs point to a decline in oil stockpiles there as well.

This change is most noticeable in India, a significant consumer of Nigerian crude oil, where Indian refiners are refusing to accept cargoes from tankers owned by the sanctioned Russian company Sovcomflot PJSC, leading to a move away from sanctioned Russian oil and toward US crude.

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