Nigerian Oil Prices Slip Below $68 Amid Ukraine Drone Strikes on Russia

Nigeria’s leading crude grades, Bonny Light and Brass River, have fallen below $68 per barrel as renewed geopolitical tensions weigh on global oil markets. The decline comes in the wake of intensified Ukrainian drone strikes on Russian oil facilities, a development that initially rattled markets but ultimately failed to sustain higher price levels. On Monday, international benchmarks reflected the pressure, with Brent crude trading around $67.3 per barrel and West Texas Intermediate settling near $62.8 per barrel. Nigerian crude, which is usually priced at a slight premium due to its low sulfur content, slipped below the $68 threshold as traders assessed the balance between geopolitical risks and broader supply-and-demand fundamentals. The immediate trigger for market volatility was a series of weekend drone strikes by Ukrainian forces on critical Russian energy infrastructure. Among the targets were the Kirishi refinery in northwest Russia and the Primorsk export terminal on the Baltic coast. The attacks caused fires and temporary disruptions to Russian loadings, raising fears of tighter supply in the short term. Prices initially climbed as the news broke, but those gains quickly gave way to renewed concerns over weak demand and ample production. Despite the supply risks posed by Russia’s disrupted exports, analysts say several factors are keeping a lid on prices. Global demand growth remains sluggish, particularly in the United States and parts of Asia, where refinery runs and fuel consumption have not met expectations. At the same time, OPEC+ producers are preparing to scale up output, ensuring that the market remains well supplied. This combination has muted the impact of the Ukrainian strikes, which many traders believe will not result in long-term supply shortages given Russia’s ability to restore operations quickly. For Nigeria, the drop in oil prices could have significant fiscal consequences. Oil revenue remains the backbone of the nation’s economy, accounting for the majority of export earnings and a large share of government income. With the 2025 budget based on more optimistic oil price projections, sustained trading below $70 threatens to tighten public finances at a time when the government is already navigating subsidy reforms and foreign exchange instability. Energy expert Dr. Chika Eze warned that the current situation underscores Nigeria’s vulnerability to global shocks, noting that the country’s dependence on crude exports leaves its economy exposed to external volatility. According to him, unless prices rebound, Nigeria may face challenges in meeting revenue targets and funding key projects outlined in the national budget. Looking ahead, the oil market is expected to remain volatile. Any further strikes on Russian export facilities could push prices higher, especially if supply disruptions are prolonged. However, if demand continues to soften and OPEC+ follows through on its plans to increase production, prices could slip even lower. For Nigeria, the developments in Eastern Europe and the decisions taken by major oil producers in the coming weeks will be crucial in determining whether its export revenues stabilize or come under further strain.