Global Oil Shock: Iran-Israel Conflict Triggers Petrol Price Hike In Nigeria

The intensifying conflict between Iran and Israel has ignited a sharp spike in global crude oil prices, sending shockwaves through Nigeria’s fuel market. Ten major petroleum marketers in Nigeria have raised depot prices, reacting to the global turmoil that has pushed crude oil prices up by 8.8%—from $68 to $74 per barrel.

At the heart of the crisis is Iran’s threat to block the Strait of Hormuz, a crucial maritime route that transports over 20% of the world’s oil and gas supply. Maritime experts warn that any disruption to this channel could severely destabilize global energy trade and supply chains.

Depot Price Hikes by Major Nigerian Marketers:

• Emadeb: ₦827 → ₦845 (+2.18%)

• Ever: ₦866 → ₦870 (+0.46%)

• Aiteo: ₦835 → ₦840

• Pinnacle: ₦829 → ₦845

• Dangote Refinery: ₦830 → ₦840

• MENJ: ₦810 → ₦850

• Swift: ₦830 → ₦845

• Rainoil (Lagos): ₦840 → ₦850

• First Royal: ₦826 → ₦838

• First Fortune: ₦850 → ₦860

According to PetroleumPrice.ng, the ongoing instability in global oil markets could lead to further increases in depot prices in the weeks ahead. Analysts fear that continued military strikes and retaliation could prolong volatility in the energy sector.

OPEC highlights that Iran’s vast natural resources—spanning petroleum, natural gas, coal, and minerals—only heighten the geopolitical stakes.

While the United States has called for calm, Iran has promised a "harsh response," adding more uncertainty to an already tense situation. Global investment firm JP Morgan has warned that crude prices could soar to between $120 and $130 per barrel if the Strait of Hormuz is closed and military escalation continues.

Economic Fallout for Nigeria

Dr. Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise (CPPE), said the crisis presents both opportunities and threats to Nigeria’s fragile economy.

“This conflict introduces troubling variables to an already unstable global economy,” Yusuf stated. “For Nigeria, it’s a double-edged sword.”

According to him, the recent 15% surge in crude prices—from $65 to $75 per barrel—will likely lead to higher local prices for petrol, diesel, jet fuel, and gas. This will fuel inflation, increase production and transport costs, and strain household budgets.

“These escalating energy costs will drive inflation even further,” Yusuf warned. “We’ll also see imported inflation due to global energy price hikes.”

He added that rising inflation might push the Central Bank toward tighter monetary policy, leading to higher interest rates and tougher borrowing conditions. Local businesses, especially those not linked to oil, may bear the brunt. Nigerian firms with ties to the Middle East are also exposed to new levels of risk.

“While increased oil revenue may seem like a win, excessive monetization could destabilize the exchange rate,” Yusuf explained. “That said, higher oil prices have historically driven GDP growth and stock market performance in Nigeria. If prices stay elevated, the Nigerian capital market could see a boost.”

A Fragile Opportunity

Professor Wumi Iledare, a respected petroleum economist, described the current scenario as a “double-edged sword” for Nigeria. With oil prices inching towards $90 per barrel, he said factors like OPEC+ production discipline, Middle East tensions, and strong global demand are driving the market upward.

“For Nigeria—the 15th-largest oil exporter globally—this surge could mean a much-needed foreign exchange boost and better fiscal support,” Iledare said. “But the gains come with high risks. Nigeria must act fast to harness the benefits while mitigating potential shocks.”

The Organisation of Gas Producers and Suppliers Association of Nigeria (OGSPAN) has echoed similar sentiments, predicting that the oil price surge may positively impact Nigeria’s 2025 budget projections. However, they caution that unless the country boosts crude output and stabilizes its domestic refining sector, the benefits could be short-lived.