Brent crude jumped 2.22% to $65.33 per barrel on Monday, while US West Texas Intermediate (WTI) crude also climbed 3.36% to $62.39 per barrel by 4:35 PM WAT, according to Reuters.
Okay.ng reports that the price surge comes in the wake of a major breakthrough in trade relations between the United States and China, the world’s two largest consumers of crude oil. The two nations agreed to a 90-day pause on imposing new tariffs and announced a mutual reduction in existing levies, following weekend negotiations in Geneva, Switzerland.
As part of the deal, both countries committed to slashing their respective tariffs by over 100 percentage points, bringing them to a 10% baseline rate. Currently, the US has tariffs of 145% on Chinese imports, while China maintains 125% in retaliatory duties.
The agreement has reignited investor confidence in global energy demand, contributing to the sharp uptick in oil prices.
Despite the temporary market boost, Nigeria may still face fiscal challenges. The 2025 budget of the federal government is benchmarked at $75 per barrel, a figure that remains out of reach under current market conditions.
Bayo Ojulari, Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company (NNPC) Limited, on Monday warned that the country is unlikely to realize projected revenues from new upstream oil projects due to the sustained dip in global prices.
Also addressing the issue last month, Wale Edun, Minister of Finance, stated that the federal government would prioritise critical expenditures and accelerate oil production to make up for revenue shortfalls.
As oil continues to play a central role in Nigeria’s economic planning, developments in global trade diplomacy will remain a key factor in the country’s revenue outlook.
