Nigeria's President Muhammadu Buhari has won a second term in office after a contentious Nigerian election this weekend, but the opposition are refusing to accept the outcome and a period of uncertainty and unrest could follow.
That could impact the OPEC member's oil production, according to RBC Capital Markets' Global Head of Commodity Strategy Helima Croft.
"With the opposition alleging fraud and refusing to the accept the outcome, the risk of further unrest remains high in the weeks ahead, especially in the restive oil region, which was the scene of some of the worst Election Day unrest," Croft said in a note Wednesday co-authored with RBC analysts Christopher Louney, Michael Tran and strategist Megan Schippmann.
"If this election does bring a return to militancy in Nigeria's oil region and major infrastructure attacks, it would be a very material event for the oil market, with two OPEC countries (Venezuela and Iran) under U.S. sanctions and Saudi Arabia continuing to cut production," they noted.
"Given the premium that the American president places on low oil prices, he will need to hope that Nigeria does not revert to past practice."
Nigeria's election last weekend did not run smoothly and was marred by delays, logistical problems, outbreaks of violence and deaths, and allegations of vote rigging.
Buhari, who leads the All Progressives Congress (APC), won the election with almost 15.2 million votes (or 57 percent), the country's Independent National Electoral Commission (INEC) announced Tuesday evening. Buhari's nearest rival, Atiku Abubakar, who heads the People's Democratic Party (PDP), received around 11.2 million votes, or 42 percent.