Business
Naira Shows Resilience Amid Middle East Tensions and Rising Oil Prices
Nigeria’s naira shows resilience despite Middle East tensions, supported by CBN interventions, rising oil production, and growing foreign reserves
Nigeria’s naira is exhibiting renewed resilience, even as ongoing geopolitical tensions in the Middle East continue to place pressure on the currency.
Also read: Naira Declines Amid USD Pressure on February 19, 2026
Analysts suggest this stability signals a “new normal,” contrasting with the extreme volatility seen in previous years.
Experts predict the naira will trade within a range of N1,350 to N1,400 per US dollar by the end of the week.
However, any escalation of conflict in the Middle East could push parallel market rates closer to N1,450, as investors seek safe-haven assets.
Conversely, the naira could strengthen toward N1,300 if Nigeria surpasses oil production of 1.6 million barrels per day and the Central Bank of Nigeria (CBN) intervenes strategically.
Periods of global uncertainty often trigger capital outflows from Nigeria and other frontier markets, with investors shifting funds into safer instruments such as the US dollar, Treasury bonds, and gold.
This pattern underscores the naira’s sensitivity to both domestic economic policy and international developments.
The CBN has played a key role in stabilising the naira.
Foreign exchange reserves surged to $50.45 billion in February 2026 a 13-year high giving the central bank substantial “firepower” to meet dollar demand.
With roughly ten months of import cover, Nigeria is better positioned than ever to protect its currency.
Reflecting growing confidence in economic stability, the CBN cut the Minimum Policy Rate (MPR) to 26.5% from 27% in February 2026, the first rate reduction amid a tightening cycle in several years.
This strategic pivot aims to support broader economic growth, projected at 4.3% to 4.7% in 2026.
Nigeria’s dependence on oil, which accounts for roughly 85% of foreign exchange earnings, means crude production and global prices heavily influence the naira.
The upcoming Dangote Refinery, with a capacity of up to 1.4 million barrels per day, is expected to reduce petrol imports, easing pressure on reserves.
The Nigerian National Petroleum Corporation (NNPC) has introduced new crude grades Utapate, Obodo, and Cawthorne boosting daily inflows of hard currency and helping Nigeria approach its OPEC quota of 10.5 million barrels per day.
Geopolitical tensions, however, have a dual effect. Rising crude prices, around $75 per barrel after recent attacks, increase foreign reserves, but heightened uncertainty can raise import costs and trigger capital flight, challenging currency stability.
Nigeria’s 2026 budget is based on a benchmark crude price of $64.85 per barrel, meaning sustained higher prices could significantly strengthen reserves, projected between $45 billion and $51 billion.
Domestic challenges, including oil theft and aging infrastructure, continue to limit consistent daily production, preventing Nigeria from fully capitalising on potential gains.
Global currency trends also affect the naira.
The US dollar index (DXY) recently retreated from five-week highs to 97.90 during Monday’s Asian trading hours.
Also read: Dangote Predicts Naira Could Strengthen to N1,100
Nevertheless, military escalations in the Middle East, including US and Israeli strikes in Iran and subsequent retaliations, are expected to maintain demand for the dollar as a safe-haven currency, indirectly influencing Nigeria’s currency and foreign reserves.
TotalEnergies and Nigerian independent energy company AMNI International have taken the Final Investment Decision on the $800 million Ima Gas Project, more than five decades after the gas field was discovered.
The Ima Gas Project, located in shallow waters across Oil Mining Leases 112 and 117 near Bonny Island, Rivers State, is expected to begin production in 2028 and reach a plateau of 350 million cubic feet of gas per day.
The development is expected to play a major role in supplying feed gas to Nigeria LNG, with the Ima field projected to provide about one-third of the additional gas required for the ongoing Train 7 expansion.
Train 7 is expected to increase Nigeria LNG’s liquefaction capacity from 22 million tonnes per annum to 30 million tonnes per annum, strengthening Nigeria’s capacity to process and export liquefied natural gas.
The Ima field was discovered in 1973 but remained undeveloped for more than 50 years. The Final Investment Decision provides the commercial and financial basis for finally developing the long-dormant resource.
Under the development plan, TotalEnergies will operate the project with a 40 per cent interest, while AMNI will hold the remaining 60 per cent.
The field will be developed using a single offshore platform connected to Nigeria LNG’s facility on Bonny Island through a 22-kilometre pipeline.
TotalEnergies said its investment in the project is more than $600 million, while the Federal Government described the overall Final Investment Decision as an $800 million investment.
At the FID signing ceremony in Abuja, TotalEnergies Exploration and Production Nigeria Managing Director, Mathieu Bouyer, described the decision as the culmination of a development process that had stretched across several decades.
He said the project reflected increased confidence in Nigeria’s investment environment and highlighted reforms targeting the non-associated gas sector as part of the factors that helped make the development commercially viable.
President Bola Tinubu welcomed the investment, saying the project demonstrated the potential of reforms introduced to reduce the cost and time required to develop oil and gas projects.
The President said the government had introduced incentives aimed specifically at unlocking onshore and shallow-water gas projects that had remained undeveloped for years.
He said the Ima development would create opportunities for Nigerian businesses, engineers, technicians and contractors, while generating jobs, economic activity in host communities and additional export earnings.
The project is also expected to have a strong Nigerian content component. TotalEnergies said all key contractors for the development would be Nigerian companies, while about 60 per cent of the workforce during the development phase is expected to come from host communities.
The development will incorporate measures aimed at reducing emissions. TotalEnergies said the platform would receive electricity from shore, operate without routine flaring and use permanent methane detection and monitoring systems.
The Federal Government said the project is part of efforts to turn Nigeria’s large natural gas reserves into productive assets capable of supporting industrialisation, energy supply, jobs and export earnings.
Special Adviser to the President on Energy, Olu Verheijen, said the Ima development illustrated the importance of creating commercial and investment conditions that allow previously stranded resources to be developed.
The government also noted that Nigerian financial institutions arranged 77 per cent of the project’s financing, further highlighting the participation of domestic financial institutions in the development.
For Nigeria LNG, the project comes as the company continues work on the Train 7 expansion, which is designed to increase the Bonny Island plant’s liquefaction capacity and strengthen the country’s position in the global LNG market.
-
Politics3 years ago
13 Ondo Assembly Members Disown Endorsement of Aiyedatiwa
-
Politics3 years ago
APC Group, Ondo Govt, Quarrel Over Money for Endorsement
-
Trending News5 years agoStop unsavoury, inciting statements – DSS warns
-
Others5 years agoAdron Homes Celebrates 10 Years Of Housing Excellence
-
Humanity5 years agoPresident Buhari Commiserates With Ambassador Maureen Tamuno Over The Loss Of Her Father
-
Others7 years agoEX- CUSTOMS BOSS, IBRAHIM MERA’S DWINDLING FAME
-
Business2 years agoBigi Carbonated Soft Drinks Treats 40 Consumers to an Epic Easter Movie Hangout
-
Business2 years agoWema Bank Shines at Global SME Finance Forum Conference Awards 2024 …Awarded: • SME Financier of the Year (Africa) • Platinum Award for Best Financier for Women Entrepreneurs (Africa)