The escalating military confrontation involving Iran, the United States and Israel is sending shockwaves through global energy markets, with crude oil prices rising sharply and creating new economic pressures for countries like Nigeria.
Over the past two weeks, international crude benchmarks have surged dramatically. Brent Crude, the global benchmark used to price much of the world’s oil, climbed from about $70 per barrel in early February 2026 to over $109 per barrel by March 9, representing a rise of more than 55 percent within a month.
West Texas Intermediate (WTI) also surged to about $109 per barrel, reflecting heightened fears of supply disruption in the Middle East.
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The surge is largely driven by fears that the conflict could disrupt crude oil shipments from the Persian Gulf.
The region is home to some of the world’s largest oil producers, and a key transit route — the Strait of Hormuz — carries nearly 20 percent of global oil supply every day. Any disruption to this narrow waterway could instantly tighten global oil supply and send prices even higher.
Indeed, market analysts estimate that the war has already introduced a “risk premium” of about $14 per barrel into oil prices as traders price in potential supply shocks.
Impact on Nigeria’s Petrol Prices
For Nigeria, the effects are immediate and complex. As Africa’s largest crude oil producer, the country may benefit from higher export earnings.
Nigeria currently produces between 1.4 million and 1.6 million barrels of crude oil per day, meaning every $10 increase in oil price could potentially add hundreds of millions of dollars to government revenues annually.
However, the benefits are not evenly felt across the economy. Nigeria still depends significantly on refined petroleum imports and market-linked pricing, meaning global oil shocks often translate into higher domestic fuel costs.
In recent weeks, petrol prices across Nigeria have climbed rapidly. Retail prices have moved from around ₦870–₦899 per litre earlier in the crisis to between ₦960 and above ₦1,000 per litre in some cities, including Abuja and Lagos.
Energy analysts warn that if crude oil stabilises above $100 per barrel, petrol prices could move further toward ₦1,100 per litre, especially if exchange rate pressures and refinery pricing adjustments continue.
The war has already disrupted shipping activities in the Persian Gulf. Reports indicate that hundreds of oil tankers have been stranded near the Strait of Hormuz, while some oil majors temporarily halted tanker movements due to security risks.
Goldman Sachs analysts warn that if disruptions continue, global oil supply could face a deficit of up to 20 million barrels per day, potentially pushing oil prices toward $150 per barrel in a worst-case scenario.
Such a development would not only push fuel prices higher in Nigeria but also increase the cost of transportation, food production and electricity generation.
Economic Implications for Nigeria
Higher oil prices traditionally boost Nigeria’s external finances because crude exports account for over 85 percent of the country’s export earnings and nearly half of government revenue.
In the short term, the surge in oil prices could strengthen Nigeria’s foreign exchange inflows, support the naira and increase allocations from the Federation Account Allocation Committee (FAAC).
However, economists warn that without higher production levels and stronger domestic refining capacity, Nigeria may not fully benefit from the price rally.
More importantly, higher oil prices tend to fuel inflation. Rising fuel costs increase transport fares, food prices and manufacturing expenses, further squeezing households already grappling with high living costs.
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The Iran–U.S.–Israel war once again exposes Nigeria’s vulnerability to global energy shocks. Despite being one of the world’s major oil producers, the country remains highly exposed to fluctuations in international oil markets.
Until Nigeria significantly expands domestic refining capacity, improves oil production efficiency and diversifies its economy beyond petroleum, distant geopolitical conflicts will continue to determine the price Nigerians pay at the fuel pump.
In essence, a war thousands of kilometres away is once again shaping the cost of living for millions of Nigerians.
