Global oil prices have surged past $90 per barrel for the first time since April 2024, as the escalating conflict between US-Israeli forces and Iran disrupts shipments through the strategic Strait of Hormuz. Brent crude futures climbed 6.35 percent to $90.83 a barrel on Friday, while West Texas Intermediate jumped 9.81 percent to $88.96, marking the strongest weekly gain since the extreme volatility of the COVID-19 pandemic in spring 2020.
The price spike follows the effective closure of the Strait of Hormuz, through which approximately 20 percent of the world’s oil passes daily. Ship-tracking data confirms that no crude shipments have moved through the waterway since March 1, with analysts estimating the market is losing between 7 million and 11 million barrels of daily supply. Qatar’s energy minister has warned that if the strait remains closed, prices could rapidly escalate to $150 per barrel within weeks.
For Nigeria, the price surge presents a classic double-edged shock that tests the country’s economic resilience. According to a new geopolitical assessment by SBM Intelligence, while higher crude prices could temporarily increase Nigeria’s export earnings, the broader implications include reduced foreign investment, capital flight, and higher borrowing costs.
“The Iran–Israel confrontation is likely to trigger volatility in global oil prices,” the SBM report stated, warning that Nigeria’s historical approach of “reactive diplomacy, coupled with limited economic foresight, leaves the country particularly exposed to external shocks”. The firm specifically highlighted the potential for the crisis to affect Nigeria’s access to debt markets, noting that increased risk perception among international investors may lead to higher yields on Nigerian government bonds and more expensive credit for businesses.
This warning carries particular weight given Nigeria’s ongoing reliance on debt to finance fiscal deficits. Any sustained uptick in borrowing costs could constrain government spending, slow public investment, and tighten credit availability for the private sector at a time when economic recovery remains fragile.
The impact across African economies will be uneven, according to Fitch Solutions. Oil exporters like Nigeria could see currency support from higher crude prices, while energy importers such as Kenya and South Africa face depreciation pressures driven by weaker terms of trade and risk-off sentiment. Kenya’s shilling is “sharply exposed” to higher oil prices and global risk aversion, threatening macroeconomic stability given the country’s large stock of foreign-currency debt.
The Sea Empowerment and Research Center (SEREC) has warned that sustained hostilities could push global oil prices higher while also increasing freight costs and insurance premiums for vessels operating in sensitive maritime corridors. This translates into rising fuel and food prices, currency pressures, and wider inflation across African economies already struggling with global supply disruptions.
For Nigeria, the contradiction is acute. Higher crude prices boost federation account inflows, but the country’s continued reliance on imported refined products means these gains are partially offset by increased landing costs for petrol and diesel. Domestic fuel prices have already risen, with Dangote Petroleum Refinery adjusting its ex-depot price in response to global volatility, and further increases are likely if crude remains elevated.
The crisis exposes Nigeria’s structural vulnerabilities in stark relief. SBM Intelligence urged the government to strengthen economic intelligence, improve crisis preparedness, and adopt more proactive fiscal and monetary policies. Recommended measures include expanding monitoring of global energy markets, enhancing macroeconomic contingency planning, and working to stabilise investor confidence through transparent economic governance.
Ikemesit Effong, a partner at SBM Intelligence, framed Nigeria’s position in broader terms: “Strengthening Nigeria’s institutional capacity to anticipate and respond to external shocks is essential. A reactive stance will leave the country vulnerable to higher borrowing costs and economic instability”. The warning echoes through an economy where each geopolitical tremor tests the limits of fiscal and monetary buffers.
As the conflict continues with no immediate resolution in sight, Nigeria faces the challenge of navigating between temporary oil windfalls and enduring structural risks. The path forward requires disciplined management that converts geopolitical turbulence into resilience rather than vulnerability—building fiscal buffers, protecting critical infrastructure, and accelerating the transition to domestic refining that insulates the economy from imported price shocks.
