Iran-Israel War Pushes Global Oil Prices Higher, Petrol Prices Rise in Nigeria: Experts Warn of Economic Impact
According to market reports, the price of crude oil jumped by 8.8%, rising from $68 to $74 per barrel, as fears mount that the crisis could escalate further and impact global energy supplies. These developments are especially alarming given Iran’s threat to shut down the Strait of Hormuz, a vital waterway through which more than 20% of the world's oil and gas is transported.
The Strait of Hormuz: A Geopolitical Flashpoint with Global Consequences
Iran’s warning to block the Strait of Hormuz—a narrow but crucial sea route between the Persian Gulf and the Arabian Sea—has raised significant concerns across the world. Maritime and energy analysts agree that any disruption in this corridor could severely affect global oil trade and prices.
“If Iran follows through on this threat, we could be looking at major supply shortages,” warned a maritime expert interviewed by international outlets. “This will not just impact the Middle East; the entire world, including Nigeria, will feel the consequences.”
Nigerian Petroleum Marketers React to Crude Price Surge
In response to the upward pressure on global crude prices, Nigerian depot owners and petrol marketers are adjusting their prices accordingly. The new depot prices from 10 key players show a significant hike, although the degree of increase varies by company.
Here are the updated depot prices:
-
Emadeb: ₦827 → ₦845 per litre (+2.18%)
-
Ever: ₦866 → ₦870 per litre (+0.46%)
-
Aiteo: ₦835 → ₦840 per litre
-
Pinnacle: ₦829 → ₦845 per litre
-
Dangote Petroleum Refinery: ₦830 → ₦840 per litre
-
MENJ: ₦810 → ₦850 per litre
-
Swift: ₦830 → ₦845 per litre
-
Rainoil (Lagos): ₦840 → ₦850 per litre
-
First Royal: ₦826 → ₦838 per litre
-
First Fortune: ₦850 → ₦860 per litre
These adjustments show that Nigeria’s domestic fuel pricing is directly affected by the fluctuations in the international crude oil market, especially during geopolitical crises.
Experts Predict More Increases in Coming Weeks
According to a recent report by Petroleumprice.ng, the volatility in the global oil market is far from over. The escalating Israel-Iran conflict could trigger further disruptions in oil supply, which may lead to continued price increases in the Nigerian petroleum sector.
“The market is very sensitive right now,” the report noted. “If military actions persist or escalate, depot prices in Nigeria are likely to rise further in the coming weeks.”
Global Financial Forecasts: Crude Oil Could Hit $130 per Barrel
International financial institutions are also keeping a close watch on developments in the Middle East. JP Morgan, a leading global investment bank, has warned that in a worst-case scenario—where the Strait of Hormuz is shut down completely due to military escalation—crude oil prices could spike to between $120 and $130 per barrel.
While the United States has called for restraint, Iran has promised a “harsh response” to any perceived threats, further adding to global uncertainty.
Economic Implications for Nigeria: Mixed Outcomes Ahead
Dr. Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise (CPPE), has described the ongoing conflict as a dangerous development with the potential to shake Nigeria’s already fragile economy.
“The war introduces troubling dimensions to an already unstable global economy,”
— Dr. Muda Yusuf
He explained that the recent jump in oil prices—from $65 to $75 per barrel in just a few days—represents a 15% increase and will likely result in rising prices for petrol, diesel, jet fuel, and cooking gas in Nigeria.
“These rising energy costs will feed directly into inflation,” he noted. “We also expect imported inflation due to the global impact of higher energy prices.”
Yusuf warned that the inflationary pressure could force the Central Bank of Nigeria (CBN) to tighten its monetary policy, which would result in higher interest rates and tougher borrowing conditions for Nigerian businesses. This could particularly affect non-oil sectors and businesses with direct or indirect links to the Middle East.
“While Nigeria may benefit from higher oil revenues, there’s also a risk of monetary expansion from oil monetization, which could destabilize the exchange rate,” he added. “However, historically, there’s a positive correlation between higher crude prices, GDP growth, and the Nigerian stock market. If oil prices stay high, the outlook for the market could improve.”
A Double-Edged Sword for Nigeria, Says Petroleum Economist
Prof. Wumi Iledare, a respected petroleum economist, believes the current oil price rally presents both opportunities and risks for Nigeria.
“For Nigeria, the world’s 15th-largest oil exporter, this price surge offers a potential windfall in foreign exchange and budget support,” he said. “But risks remain, and Nigeria must maximize this opportunity while managing the challenges that come with such volatility.”
He noted that rising oil prices—approaching $90 per barrel—are being driven by a combination of OPEC+ supply discipline, persistent geopolitical tensions in the Middle East, and strong global demand for energy.
Can Nigeria Capitalize on Higher Oil Prices?
While higher crude oil prices theoretically benefit Nigeria by increasing revenue from oil exports, experts caution that these gains may be short-lived unless Nigeria can address key structural challenges.
The Organisation of Gas Producers and Suppliers Association of Nigeria (OGSPAN) has projected that if current price trends continue, Nigeria could see significant revenue boosts for the 2025 budget. But they also warn that these benefits can only be sustained if the country improves its crude oil production and enhances domestic refining capacity.
For years, Nigeria has struggled with low oil output due to issues such as pipeline vandalism, oil theft, and underinvestment in exploration and production. Furthermore, the country relies heavily on imported refined petroleum products due to poor performance of its local refineries—despite massive investments in refineries like the Dangote Petroleum Refinery.
Without resolving these internal challenges, experts say, Nigeria may not be able to fully take advantage of the ongoing global oil price surge.
Conclusion: Nigeria at a Crossroads
The Israel-Iran conflict is not just a regional war—it has become a global economic issue, with ripple effects being felt across continents, including here in Nigeria. With crude oil prices surging and petrol depot prices rising, Nigerians are already seeing the impact at the pump.
While the situation presents a potential fiscal windfall for the Nigerian government, it also comes with serious risks: rising inflation, monetary instability, and increased pressure on households and businesses.
To navigate this critical period, policymakers must act fast. They need to stabilize oil production, boost refining capacity, and carefully manage oil revenues to ensure long-term economic stability.
For everyday Nigerians, the developments serve as a reminder that global events can have immediate and significant consequences at home.
