Nigeria Eyes FX Gains as Crude Oil Tops $105/Barrel — CBN Optimistic on $51bn Target

Crude oil is trading above $105 per barrel, and for once, Nigeria’s numbers are pointing in the right direction.

That price is well past the $64.85 per barrel Nigeria used to build its 2026 federal budget, meaning every barrel sold right now adds money the government wasn’t counting on. The Central Bank of Nigeria says foreign exchange reserves are on track to hit $51 billion by year-end — they were at $48.44 billion as of April 23, which already covers more than 12 months of imports.

The price surge is driven by the Middle East standoff. If tensions escalate into a full conflict affecting the Strait of Hormuz — through which about 20 per cent of global crude passes — analysts say prices could spike to $150 per barrel. That would be a significant windfall for Nigeria.

CBN Governor Olayemi Cardoso has spent the past year pushing through reforms aimed at making sure oil earnings actually show up in the forex market: exchange rate unification, liquidity management improvements, and measures to bring foreign capital back. The naira has responded — it recently dipped back below N1,400 to the dollar, a threshold it hadn’t crossed in over a year.

The upside is real. The risk is that higher oil prices could also push up the cost of imported fuel and feed inflation — a tension Nigerian policymakers know well and will need to manage carefully.

Sources: Punch, BusinessDay, Tech Finance Markets