Nigerian crude headed for its largest weekly gain since June after US sanctions on major Russian producers rocked the market, increasing the likelihood of supply disruptions and increased demand for alternative grades.
Nigeria’s flagship light sweet crude oil grade, known as Bonny Light (API gravity ~32.9°, low sulfur content), is mostly produced in the Niger Delta and is highly valued by refiners for producing high-value products like diesel and gasoline. Its quality usually causes it to trade at a slight premium to the Brent benchmark.
Bonny Light posted a significant price increase that will position it for its biggest weekly gain since the June 2025 spike, when prices rose from about $64 per barrel to $69.5 per barrel because of OPEC+ compliance and a recovery in global demand.
The weekly change of +8.2% represents the biggest weekly gain since the +4.8% rally during the week of June 10–16, 2025. The dynamics of the crude market, including the US inventory draws, came as a surprise, and sanctions on Russian energy exports.
The average price of Bonny Light so far this year is about $78 per barrel, with a peak of $85.2 per barrel in January 2025 and a low of $62.53 per barrel in September. The current surge increases federal oil revenues by pushing them above Nigeria’s 2025 budget benchmark of $75 per barrel.
West Texas Intermediate was below $62 on Friday, while Brent was trading close to $66 a barrel, up about 7% for the week. Russian crude flows to India, a major buyer, are expected to decline, while some Chinese state-owned refiners have suspended their purchases following the sanctions on Rosneft PJSC and Lukoil PJSC.
The US actions coincide with a surge in global supply, and Russia has a wealth of experience evading sanctions imposed because of its conflict in Ukraine. Kuwait’s oil minister warned of rising oil prices and stated that OPEC is ready to boost output if demand calls for it.
Markets understand the damage to the budget but will use their network of traders and shadow tankers to limit the damage, said an official close to the Kremlin. Igot Sechin’s Rosneft, the largest producer, and Lukoil are the two largest producer. Ukraine continues to attack Russian refineries and crude pipelines, and the EU brought more sanctions, aimed at the Russian energy infrastructure, to the Kremlin.
Kyiv said it struck a Rosneft plant. President Trump had sanctions ready to go on Russia, but no action on Ukraine has resulted in a newfound decisiveness to use them. Previously, the West sought to limit revenue for the Kremlin through a price cap, hoping to prevent supply disruptions then avoid skyrocketing prices.
Some Chinese majors have halted spot purchases of Russian crude, primarily ESPO, while others are evaluating the effects of US sanctions. Next week, President Donald Trump and his counterpart, Xi Jinping, will meet to discuss the China-Russia oil trade.
This month, the beginning of the month brought more of a spread on the Brent crude oil strip because of apparent backwardation, but it was more tightly spread. After the sanctions, it was more readily apparent a shift due to the sanctions.