Escalating tensions between Iran and the United States have triggered fresh concerns over a possible increase in fuel prices in Nigeria, as global oil markets react to renewed hostilities in the Middle East.
Over the weekend, U.S. and Israeli airstrikes reportedly targeted multiple locations in Iran, killing several officials, including former Iranian president Mahmoud Ahmadinejad, who was said to be under house arrest at his residential villa. The strikes prompted retaliatory actions from Iran, raising fears of a prolonged conflict with significant implications for global energy supply.
Energy analysts warn that continued escalation could disrupt crude oil transportation routes and drive up international oil prices — developments that typically translate into higher diesel and petrol costs for Nigerian consumers.
The warning comes weeks after Dangote Petroleum Refinery owner Aliko Dangote announced a reduction in the ex-depot price of petrol from N799 to N774 per litre. Economists say gains from recent domestic price adjustments may be short-lived if tensions between the two countries continue to pressure global oil markets.
Global crude prices already showed signs of volatility over the weekend, rising by about 10% after several oil companies reportedly suspended tanker movements near the Strait of Hormuz, one of the world’s most critical oil transit routes. Any prolonged disruption in the corridor could trigger further supply shocks and price spikes.
As of 10 p.m. Sunday, Brent crude traded at $72.87 per barrel, while West Texas Intermediate stood at $67.02. Nigeria’s Bonny Light crude was priced at $78.62 per barrel. Analysts warned prices could approach the $90 benchmark if hostilities intensify.
Chief Executive Officer of Dairy Hills, Kelvin Emmanuel, said Nigeria remains highly exposed to global price fluctuations because the Dangote Refinery still relies partly on imported crude feedstock.
“Dangote currently processes an average of 18 million barrels of crude oil monthly. Out of this, about 12 million barrels are imported, while he gets about 5.7 million barrels — equivalent to six cargoes — from the Nigerian National Petroleum Company Limited,” Emmanuel said.
“The commercial operators are not keen on supplying him feedstock because they hide under the guise of willing buyer, willing seller to inflate third-party commissions to the domestic refiner, in contravention of Section 109 of the Petroleum Industry Act,” he added.
Analysts caution that a prolonged Iran-U.S. confrontation could have wider economic consequences, given the region’s strategic importance to global energy trade. The reported death of three U.S. service members during the hostilities is expected to further heighten tensions, after former U.S. President Donald Trump vowed retaliation and said ongoing combat operations in Iran would continue.
Financial markets have also begun reacting to the instability. The Dubai Financial Services Authority announced a temporary suspension of trading on Nasdaq Dubai on Monday and Tuesday amid rising regional uncertainty.
In a related development, the United Arab Emirates recalled its ambassador from Iran and shut down its embassy in Tehran following missile strikes it said targeted civilian infrastructure, including Jebel Ali Port and airports in Dubai and Abu Dhabi.
