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Iran–US–Israel conflict may trigger oil price surge, boosting Nigeria’s export earnings.
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Strait of Hormuz risk threatens 20% of global crude supply, increasing market volatility.
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Nigeria’s low oil output may limit gains despite potential revenue windfall.
The Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, has warned that the escalating tensions involving Iran, the United States, and Israel could have both positive and negative consequences for Nigeria’s economy.
In a statement issued in Lagos, Yusuf said the growing conflict has injected fresh geopolitical uncertainty into the global economy, with energy markets expected to feel the most immediate effects.
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He identified the Strait of Hormuz as a critical flashpoint, noting that roughly 20 percent of the world’s crude oil supply moves through the strategic corridor daily.
Any disruption, he explained, could sharply raise oil prices, shipping costs, insurance premiums, and strain global supply chains.
Yusuf stressed that instability in the Middle East — a key oil-producing region — often leads to production disruptions and price volatility.
For Nigeria, where crude oil accounts for over 85 percent of export earnings and nearly half of government revenue, such developments carry major fiscal implications.
He noted that geopolitical tensions historically push oil prices higher due to fears of supply shortages. Speculation surrounding possible blockages in the Strait of Hormuz alone, he said, can cause crude prices to swing between $5 and $15 per barrel within a short timeframe.
According to him, a price surge would boost Nigeria’s export revenue, strengthen foreign exchange inflows, increase external reserves, and improve allocations from the Federation Account Allocation Committee to federal, state, and local governments.
However, Yusuf cautioned that Nigeria’s ability to benefit from higher oil prices depends heavily on production capacity. Current output, he said, fluctuates between 1.4 and 1.6 million barrels per day — below installed capacity — due to oil theft, pipeline vandalism, and underinvestment in upstream infrastructure.
“Without improved security and production efficiency, Nigeria may not fully maximise any price windfall,” he warned.
He further pointed out medium-term risks, noting that if the conflict drags on and slows global economic growth, oil demand could weaken, triggering price corrections.
While short-term revenue gains may ease pressure on the naira and bolster investor sentiment, Yusuf maintained that long-term economic stability will depend on sound domestic reforms and stronger performance in the oil sector.
