US–Israel Strikes On Iran Stoke $100 Per Barrel Crude Oil Fears

…Nigeria Eyes Revenue Upside As Fuel, Inflation Risks Rise

…Oil Sector Deregulation Exposes Consumers To Price Shock

…CPPE Warns Oil Windfall May Deepen Cost-Of-Living Pressures

Global energy markets are on edge as coordinated military strikes by the United States and Israel on Iranian targets have reignited fears of a major supply shock, with analysts predicting that crude oil prices could surge toward $100 per barrel if tensions escalate and key shipping routes are disrupted.

The ripple effects are already being felt across markets, with Brent crude and other benchmarks moving sharply higher in early trading as traders price in a geopolitical risk premium that reflects potential supply constraints.

On Sunday, global benchmarks showed significant upticks: Brent crude reached around $80 per barrel amid reports that military action in the Middle East could impact exports through the Strait of Hormuz — a strategic chokepoint through which roughly one-fifth of the world’s oil flows daily.

Analysts say that if oil shipments through the strait are restricted or halted, prices could spike even further, flirting with triple-digit levels unseen in recent years.

For Nigeria, Africa’s largest oil producer and a major crude exporter, the unfolding crisis presents a paradox of potential windfalls and emerging domestic risks. On the positive side, higher global oil prices could translate into improved fiscal revenue, foreign exchange earnings and stronger external reserves at a time when government finances remain under strain.

Analysts and industry watchers note that even at current levels, significantly above Nigeria’s 2026 budget benchmark price of around $64.85 per barrel, a sustained climb toward $100 could supercharge export earnings and provide a boost to the Federation Account, which funds federal, state and local government allocations.

“The potential for stronger oil revenues is real,” Dr Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), told THE WHISTLER.

“Higher crude prices would strengthen government receipts, foreign exchange inflows and external reserves,” positioning Nigeria to better navigate fiscal challenges.

Yusuf while speaking in the context of broader economic concerns tied to geopolitical uncertainty, however, said the domestic implications are far more complex.

Since Nigeria deregulated its oil sector in mid-2023, petrol prices have been closely tied to international crude benchmarks, refining margins and exchange-rate conditions.

Under this regime, sharp upward swings in global oil prices almost immediately translate into higher pump prices for petrol and diesel.

With local refiners like the Dangote Refinery sourcing crude at international prices, increased feedstock costs are passed through to ex-depot and pump prices, exposing consumers to higher energy bills.

Meanwhile, Nigeria still relies on imported refined products for part of its consumption, meaning that higher landing costs for imports further push up domestic prices.

The CPPE warns that the risk of an oil price-driven “windfall” may be offset by deeper cost-of-living pressures across the economy.

Higher global crude prices not only affect petrol and diesel prices but also influence broader inflationary trends by raising transportation, logistics and manufacturing costs, all of which feed into consumer prices for food and services.

“Increases in global energy costs tend to be broad-based in their impact,” Yusuf told THE WHISTLER.

He added, “If crude prices rise sharply, the cost of fuel, electricity and transport will follow, squeezing household budgets and increasing inflation.” This, he warned, could widen the gap between fiscal gains and social hardship.

Economists say that inflationary pressures could intensify if the crisis deepens, particularly since energy costs are a core driver of inflation dynamics in Nigeria’s largely deregulated downstream regime. In the mid-2025 deregulated framework, any increase in crude oil prices is quickly reflected in higher pump prices and consumer costs, a structural vulnerability that could worsen the cost-of-living crisis already facing many households.

The conflict’s impact may not be limited to fuel and inflation. CPPE highlights that volatile capital flows and investor risk aversion could also affect Nigeria’s financial markets.

He said periods of heightened geopolitical risk tend to drive global investors toward perceived safe-haven assets like U.S. Treasury bonds and gold, potentially triggering portfolio outflows from emerging markets such as Nigeria’s equity and debt markets.

According to him, while companies in the oil and gas sector might benefit from higher earnings expectations linked to rising crude prices, other sectors, including manufacturing, logistics and consumer goods could face rising input costs and operating challenges, creating mixed sectoral performance across Nigerian markets.

He underscores that structural challenges in Nigeria’s oil sector must be addressed to ensure the country can fully capitalise on any external price windfalls.

Persistent issues such as pipeline theft, oil theft, infrastructure shortfalls and under-investment in upstream capacity have limited Nigeria’s ability to maximise production and export potential, meaning that higher global prices do not automatically translate into proportionate revenue gains.

Yusuf also advised that policymakers pursue disciplined fiscal management, including the use of stabilization mechanisms to save a portion of any oil windfall, reduce fiscal deficits and prioritise capital investment over recurrent expenditure.

“At a time of global uncertainty, it is critical that any additional revenues are used prudently to build resilience rather than heighten vulnerability,” he said.

Ifeanyi ONUBA & Chris UGWU