diff --git a/lib/liquid/context.rb b/lib/liquid/context.rb
index 34051a1..2dcc6af 100644
--- a/lib/liquid/context.rb
+++ b/lib/liquid/context.rb
@@ -171,7 +171,9 @@ module Liquid
       if scope.nil?
         @environments.each do |e|
           variable = lookup_and_evaluate(e, key, raise_on_not_found: raise_on_not_found)
-          unless variable.nil?
+          # When lookup returned a value OR there is no value but the lookup also did not raise
+          # then it is the value we are looking for.
+          if !variable.nil? || @strict_variables && raise_on_not_found
             scope = e
             break
           end
diff --git a/test/integration/template_test.rb b/test/integration/template_test.rb
index 253b976..d10e1c5 100644
--- a/test/integration/template_test.rb
+++ b/test/integration/template_test.rb
@@ -261,6 +261,15 @@ class TemplateTest < Minitest::Test
     assert_equal 'Liquid error: undefined variable d', t.errors[2].message
   end
 
+  def test_nil_value_does_not_raise
+    Liquid::Template.error_mode = :strict
+    t = Template.parse("some{{x}}thing")
+    result = t.render!({ 'x' => nil }, strict_variables: true)
+
+    assert_equal 0, t.errors.count
+    assert_equal 'something', result
+  end
+
   def test_undefined_variables_raise
     t = Template.parse("{{x}} {{y}} {{z.a}} {{z.b}} {{z.c.d}}")