The price of crude oil has risen to $92 per barrel, a figure hugher than the $77.96 per barrel the 2024 budget was benchmarked on.
The rise in the price of the commodity follows 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 at about $92 a barrel while Brent Crude traded at $89 per barrel at the time of this report. 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.
While efforts to combat oil theft have intensified, Nigeria still 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.
Investors are also worried that, having sworn payback, Iran’s retaliation against Israel for an attack on Monday that claimed the lives of high-ranking military officers may cause supply interruptions in the vital Middle East-producing region.
Iran is the third-largest producer in the Organisation of the Petroleum Exporting Countries (OPEC), supporting the Hamas militia in Gaza against Israel.
Concerns over supplies were increased by the fact that according to an internal memo seen by Reuters, Mexico’s state energy corporation Pemex asked its trading section to halt up to 436,000 barrels of crude exports per day this month as it prepared to process domestic oil at the new Dos Bocas refinery.
The United States is the largest oil consumer in the world, and early signs point to a decline in oil stockpiles there as well.
