International oil benchmark, Brent crude, on Monday hit $75 per barrel and rose further amid growing geopolitical tensions in the world.
Brent, against which Nigeria’s crude oil is priced, stood at $75.16 per barrel as of 8:15pm Nigerian time, while the United States’ marker, West Texas Intermediate, traded around $68.36 per barrel.
The rise in oil prices means further accretion to the nation’s Excess Crude Account, into which the difference between the market price of oil and the budget benchmark is saved to provide a cushion when oil prices fall or extra cash is needed for spending on infrastructure.
The 2018 budget proposal, submitted by President Muhammadu Buhari in November 2017, put the benchmark oil price at $45 per barrel, compared to $44.5 per barrel for the 2017 budget.
The oil price rallied after Israeli Prime Minister, Benjamin Netanyahu, accused Iran of lying “big time” about a secretive nuclear weapons programme, ratcheting up tensions in a region that controls almost half the world’s oil.
Netanyahu’s disclosure of thousands of documents he said proved Iran definitively sought to assemble nuclear bombs comes as the US President, Donald Trump, considers whether to re-impose sanctions against Iran, the third biggest oil producer in the Organisation of Petroleum Exporting Countries.
Crude has rallied this month amid heightened geopolitical tensions and Trump’s indications that he might scrap the 2015 nuclear deal with Iran. At the same time, OPEC-led production cuts have continued to tighten global markets, despite record-setting US crude output.
Meanwhile, more Nigerian oil cargoes had been placed with tender buyers, Reuters reported on Monday.
Fewer than 10 May loading Nigerian cargoes were still available to buyers, traders said, with Qua Iboe, Forcados and Escravos left.
Offers were well above $1.50 premiums to dated Brent, with Erha pegged at a $1.80 per barrel premium.While multiple June loading Nigerian cargoes had changed hands, traders said most of these were not yet promised to end users, meaning they could be re-offered.
The differential levels varied widely, with Qua Iboe discussed as high as $1.50 above Brent and Forcados close to $1.70 per barrel above dated Brent.
Buyers were pressing for lower levels in part because of good availability of crude in Europe and the US and a wide gap between Brent and the US WTI benchmarks.