Nigerian crude oil faced market pressure amid positive signs that Iran, a major oil producer, is ready to cut a deal with the world’s largest economy.
Latest data showed Nigerian crude settled at about $68.34 on Tuesday, well below the Federal Government’s budget benchmark for crude in 2025.
Market expectations indicate that Nigerian crude may settle even lower on Thursday, as global oil traders adopt an increasingly bearish outlook.
Oil prices extended sharp declines in Thursday’s Asian trading session following reports that Iran is willing to reach a nuclear deal with U.S. President Donald Trump. An unexpected surge in U.S. crude inventories also raised concerns about a potential oversupply of oil.
Brent oil futures for June delivery fell to $65 per barrel, while West Texas Intermediate (WTI) crude futures dropped 1.7% to $61.62 per barrel.
Major oil contracts posted a decline yesterday, ending a four-day rally that had driven prices to a two-week high earlier this week. The earlier surge had been fueled by an agreement between the U.S. and China to ease tariffs imposed during their trade war.
Iran is prepared to sign a nuclear deal with President Trump, provided that all economic sanctions are lifted, said Ali Shamkhani, a senior political and nuclear adviser to Ayatollah Ali Khamenei.
These comments suggest Iran is open to negotiating a settlement, provided specific terms are met and U.S. actions align with its rhetoric. The remarks were made during U.S.-Iran nuclear negotiations, which American officials have described as having yielded positive results in recent rounds. However, investors remain skeptical, given President Trump’s continued “maximum pressure” stance toward Iran.
Nigeria’s latest oil blend, Obodo crude, has been shipped for export, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Conoil Producing Limited received commendation from NUPRC Chief Executive Gbenga Komolafe for the successful shipment of the first cargo of the Obodo crude blend.
This development reflects the growing capacity of domestic operators and their meaningful contribution to Nigeria’s crude oil production and exports, Komolafe said. He called it a significant achievement for the country’s upstream sector.
“This new Obodo crude blend strengthens Nigeria’s export portfolio in line with the Commission’s strategic objectives of enhancing production output, maximizing hydrocarbon resources, and attracting investment through superior operations and innovation,” Komolafe remarked.
Under a production-sharing contract with the Nigerian National Petroleum Company Limited, Conoil has achieved consistently favorable results, supported by regulatory frameworks that empower local industry growth.
The Federal Government revealed that Africa’s largest oil producer received over $8 billion in investments for Deepwater and gas projects in the past year. This marks a rise from the $6.7 billion previously announced as 2024 investment in Nigeria’s energy sector, according to the Special Adviser to the President on Energy, Olu Verheijen.
She attributed the increase to government reforms such as improved tax policies, faster approvals, clear regulatory frameworks, and energy-sector advancements that have made gas-to-power projects more attractive to investors.
Verheijen cited Nigeria as a leading example of successful capital attraction on the continent.
Verheijen cited Nigeria as a leading example of successful capital attraction on the continent.
“Nigeria, in less than a year, unlocked over $8 billion in Deepwater and gas Final Investment Decisions—executed within a year—thanks to strong presidential leadership, improved fiscal policies, streamlined contracting, local content regulations, and gas-to-power reforms that have made the sector commercially viable. We moved from gridlock to greenlight, and that’s how we attracted investors,” she said.
The U.S. Energy Information Administration (EIA) reported Wednesday that commercial crude oil inventories rose by 3.5 million barrels last week, bringing total stockpiles to 441.8 million barrels. This contradicted market expectations, which had projected a 2-million-barrel reduction.
The unexpected increase raised concerns about a potential oversupply or declining demand. Traders responded swiftly, selling off U.S. oil and driving prices down by more than $1 per barrel.
The EIA report added to growing fears of an oversupply scenario, particularly as OPEC+ continues to ramp up its production, compounding the issue.