Market News

Heightened tensions between Israel and Iran have resulted in a rise in oil prices, a development which is expected to further strengthen the naira in the exchange market.

The naira closed at N1549.35 per US dollar at the official window from N1553 at the beginning of the trading session last week, according to data obtained from the Central Bank of Nigeria (CBN).

The naira strengthened week on week, gaining N4 on each dollar in the official window. On Friday, the naira touched N1537 per US dollar in the forex market and a high of N1570 without FX inflows from the regulator.

This was as the Central Bank of Nigeria (CBN) injected a fresh $580 million into the foreign exchange (FX) market in May 2025 as part of aggressive efforts to stabilise the naira and bolster market confidence.

Partner at Kreston Pedabo, Olufemi Idowu, said the Nigerian government would see a rise in revenue as a result of rising oil prices.

Idowu also pointed out that with the crises in the Niger Delta and with Nigeria having used most of its crude oil production to take loans, the government would benefit much.

He said, “The price of crude oil has increased and because our budget was based on $75 barrels per day, from the revenue side, any price above $75 is to the advantage of Nigeria.

“As a country, if we are able to maintain stability in the Niger Delta and if we are able to meet our production quota from OPEC, I think it is a positive for us.

“This means that we will have more inflow of revenue. Again, the other side is that if we are able to take advantage of the crisis in the Middle East, and increase our revenue, it would mean that we are earning more foreign exchange, which will help us to have stability of the naira.

“There wouldn’t be more pressure on the naira. In recent times, we have seen the naira appreciate, and this trend will continue if we can take advantage of this situation.”

Nigeria’s oil revenue is currently on the rise as market data revealed that Nigeria’s crude oil blend, Bonny Light, traded at $78 per barrel on Friday.

The price increase is above $75 per barrel, budgeted by the Federal Government in the N55 trillion 2025 national budget.

While Bonny Light traded at exactly $78.62 per barrel, other crude blends such as Saharan, Girassol and Arab Light traded at $67.18, $79.56, and $65.72 per barrel, respectively.

The Federal Government had benchmarked $75 per barrel on more than two million bpd, including condensate, in the 2025 budget.

Oil rose again on Monday after Israel and Iran continued attacks on each other, with the market bracing for an escalation that could disrupt supply from a region that produces around a third of the world’s crude.

Brent jumped as much as 5.5% at the open before paring gains to trade around $75 a barrel, while West Texas Intermediate was near $74. Israel launched an attack on the South Pars gas field, forcing the halt of a production platform, after strikes on Iran’s nuclear sites and military leadership last week.

Projecting on how the crisis will further impact crude oil, global banking giant, JP Morgan puts its base-case oil price forecast for 2025 at more than $60 per barrel, adding that prices could hit between $120 and $130 per barrel in the event of worst-case outcomes such as military conflict and a closure of the Strait of Hormuz.