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US-Iran Deal over Strait of Hormuz May Cost Nigeria up to N13trn

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The peace deal between the United States and Iran over the Strait of Hormuz might cost Nigeria dearly in oil revenues.

Nigeria’s oil earnings recorded an estimated windfall of about N5.13 trillion in two months (February to April), as crude prices surged sharply following tensions between the United States–Iran crisis, pushing revenues far above the Federal Government’s 2026 budget estimates.

Recall that the US-Iran war started on February 28 when oil prices were below $70 a barrel.
The hostilities brought the Strait of Hormuz, a major global energy gateway, under blockade for four months.

However, three days ago, a truce was reached among all parties, leading to a ceasefire and the reopening of the channel.

While the war lasted, oil prices rose to an all time peak of over $120 per barrel, further boosting revenue for Nigeria.

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The 2026 budget is anchored on daily oil production of 1.8 million barrels per day, a benchmark oil price of $64.85 per barrel and an exchange rate of N1,400 to the dollar.

Based on these, expected daily oil revenue stands at $116.73m, derived from multiplying 1.8 million barrels by $64.85. When converted at the budget exchange rate, this amounts to about N163.42bn per day, which serves as the baseline for measuring any revenue gains or shortfalls.
Actual earnings in March and April exceeded this benchmark, largely due to a sharp rise in crude oil prices occasioned by the crisis in the Middle East.

Recent data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) indicated that Nigeria’s oil production averaged 1.55 million barrels per day, while the average crude price stood at $95.03 per barrel, according to the Central Bank of Nigeria, and the exchange rate averaged N1,370 to the dollar.

Going by these figures, daily revenue amounted to approximately $147.30m, obtained by multiplying 1.55 million barrels by $95.03. Converted at the average exchange rate for the month, this translates to about N201.80bn per day.

Despite production falling short of the budget target by about 250,000 barrels per day, the higher oil price ensured that overall revenue remained significantly above projections.

But should the reopening of Strait of Hormuz drive crude prices towards Nigeria’s 2026 budget benchmark of $64.85 per barrel as against elevated crisis level of $95 per barrel, the country could lose about N13 trillion in the remaining months of 2026.

The reopening of the Strait of Hormuz will return millions of barrels of Middle East crude to the market. Saudi Arabia, Iraq, Kuwait and the UAE collectively produce more than 15 million barrels per day, compared with Nigeria’s average output of about 1.55 million barrels per day.

The renewed availability of these supplies could narrow the premium enjoyed by Nigerian crude grades during the disruption and intensify competition in key Asian markets.

Energy

NMDPRA Issues Updates on Q3 Crude Supplies to Domestic Refineries

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From January to September 2026, the domestic refineries in Nigeria received 156.52 million barrels of crude oil.

Of the volume, 125.85million barrels (80.4 percent) were sourced from in-country while 30.66 million barrels (19.6 percent) were imported.

This was contained in the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) Factsheet September 2026 released on Thursday.

The Factsheet specifically revealed that in September 2026, 38.7 million litres of the Premium Motor Spirit PMS (petrol) were received per day, crashing from the 50.5million litres per day received in August by 23 percent.

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Stock sufficiency in September was 23.9 days, declining below the 30-day threshold.

The NMDPRA stressed that while 28.7million litres were supplied per day from domestic sources, declining by 21 percent from the previous month, 10.2 million litres were imported, reducing imported petrol by 30 percent in the period under review.

According to the Factsheet, “Domestic refining contributed about 65 percent of the national petrol requirement (consumption) in September 2026, and about 74 percent of receipts, supplemented by 26 percent of imports”.

The Dangote Refinery and Petrochemicals Company (DPRP) is the only domestic refinery which currently produces petrol in Nigeria.

The report added that the DPRP produced 47.22 million litres per day of PMS in September, supplying 28.50 million litres per day to the domestic market and exporting (35.2 percent) 15.47 million litres per day.

On capacity utilization, the refinery recorded 105.98 percent of its 650,000 barrels per day capacity in the period under review.

The Factsheet disclosed that 8.7million litres of diesel were consumed in the month under review.

The NMDPRA revealed that modular refineries supplied 4.3 percent of domestic diesel consumption in September.

Aradel and OPAC, said the Factsheet, operated below optimal capacity due to feedstock challenges and maintenance shutdowns.

September diesel receipts, according to the NMDPRA, were the lowest of the 13 months, driven by low imports and low domestic evacuation amid high prices.

The Factsheet said, “Nigeria’s energy-sector transformation is progressing. Domestic refining contributed about 65 percent of the national petrol requirement (consumption) in September 2026, and about 74 percent of receipts, supplemented by 26 percent of imports.

“Priority gas projects have reached significant mileage, with the AKK pipeline at 84 percent completion as of September 2026,” the Factsheet pointed out.

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Renaissance, Sterling Bank Back Indigenous Oil and Gas Contractors Financially

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The appetite for improving access to capital for indigenous oil and gas contractors, strengthening the capacity of Nigerian businesses to execute critical energy projects and contribute to the country’s production ambitions, has seen the Renaissance Africa Energy Company Limited (‘Renaissance’) go into a strategic financing partnership with Sterling Bank Limited.

The partnership, formalised through a Memorandum of Understanding (MoU), brings Sterling Bank into the renewed Renaissance Vendor Financing Scheme (RVFS), a structured financing programme designed to address one of the longstanding challenges confronting indigenous service providers in Nigeria’s oil and gas industry: access to timely and affordable funding for contract execution.

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The expanded programme brings together 13 financial institutions with combined financing commitments of $4.1 billion and ₦435 billion, creating a substantial pool of capital to support eligible contractors delivering projects for Renaissance, operator of the former Shell Petroleum Development Company (SPDC) joint venture assets.

Speaking on its participation, Dele Faseemo, Group Executive, Corporate and Investment Banking at Sterling Bank, described the partnership as an important opportunity to connect financial capacity with productive enterprise in one of Nigeria’s most strategically important sectors.

“At Sterling Bank, we believe financing should enable capable businesses to deliver, grow and compete. Our participation in the Renaissance Vendor Financing Scheme reflects that conviction. By providing structured funding to qualified contractors, we are supporting the businesses that keep the energy value chain moving, strengthening Nigerian content participation and contributing to the broader objective of increasing the country’s productive capacity,” Faseemo said.

For many indigenous contractors, securing a major contract represents only the first step towards business growth. The ability to mobilise equipment, procure materials, retain skilled personnel and meet demanding project timelines often depends on access to adequate working capital. Financing constraints can therefore limit the capacity of otherwise qualified businesses to execute contracts, scale their operations and participate more meaningfully in the energy value chain.

Through the RVFS, participating financial institutions will provide structured financing to eligible contractors against confirmed contracts awarded by Renaissance, subject to applicable credit assessment and approval processes. The arrangement is intended to ease funding pressures, improve project execution and strengthen the financial capacity of indigenous service providers.

Tony Attah, Managing Director and Chief Executive Officer of Renaissance Africa Energy Company Limited, highlighted the importance of the financing arrangement to the company’s growth ambitions.

“What we’ve been able to achieve as Renaissance is to go into that partnership with these incredible 13 banks who have come up to support this vendor scheme at over $4 billion and over ₦435 billion funds available for the vendors to be able to support us in our growth agenda,” Attah said.

He further emphasised the financial advantage the scheme offers participating contractors, noting that, “The interest rate that the banks are offering to the contractors is very competitive, and it is certainly better than the vendors going out to the respective banks on their own.”

The Renaissance Vendor Financing Scheme builds on a contractor financing programme established in 2010, which has evolved over the years to support local service providers executing projects across the oil and gas value chain. Its latest expansion comes as Renaissance pursues an ambitious growth strategy, including its aspiration to achieve production of one million barrels of oil equivalent per day by 2030.

Delivering on this ambition will require sustained investment not only in upstream production assets but also in the network of engineering firms, equipment suppliers, logistics providers, technical specialists and other indigenous businesses whose services are essential to operational performance.

With an established presence in corporate banking and energy sector financing, Sterling Bank continues to support businesses operating across critical segments of the Nigerian economy through tailored financial solutions, strategic partnerships and sector-specific expertise.

The collaboration reinforces the Bank’s commitment to supporting indigenous enterprise development, strengthening local capacity and financing productive economic activity, while contributing to efforts to improve Nigeria’s energy security and long-term industrial competitiveness.

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Energy

UNDC Assures on Readiness to Protect Oil, Gas Pipelines

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Pipeline contract

The Niger Delta Youths are primed to assume national responsibilities in critical areas of the economy by protecting vital oil and gas assets in the region.

The United Niger Delta Congress (UNDC) gave the assurance at a media briefing in Abuja, over the weekend, adding that the youths of Niger Delta were ready to work with the federal government in this regard.

The group maintained that youths in the region have shown that such responsibilities, including the security of pipelines, can be entrusted to them.

Speaking at the news conference, Niger Delta Youth activist, Mallam Julius Obi, said the Niger Delta is safer while the nation’s crude is flowing based on the fact that youths in the region are doing the job.

He said that being a youth should not be a disqualification from strategic national assignments but when matched with preparation and character, a national asset.

“We are calling on the federal government to note that Nigeria is full of young men and women who are prepared, disciplined and ready to carry out national responsibilities.

“We urge the federal government to keep opening the doors of strategic national service to young Nigerians who have earned trust the only way it can be earned, by delivery,” Obi said.

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The group commended President Bola Tinubu for sustaining the security reforms in the oil and gas industry and the the National Security Adviser (NSA), Mallam Nuhu Ribadu, for coordinating the protection of the nation’s pipelines, and the management of NNPCL for providing the enabling environment.

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