Analysts at Comercio Partners have noted that the ongoing oil-related tensions between Israel and Iran might affect global crude oil supply, which could impact Nigeria’s economy negatively.
This concern was raised in their May Macro Report titled “Nigeria’s Inflation Slows in May, But Trouble May Be Ahead”, published on June 16th, 2025.
According to the report, the geopolitical standoff could create fresh supply shocks that may drive up global oil prices.
While Nigeria is an oil-producing nation, the report cautions that such price surges may not necessarily benefit the country.
“For Nigeria, where fuel prices are no longer subsidized and are now tied to international benchmarks, such developments carry serious economic implications,” the analysts noted.
Even with the operational presence of the Dangote Refinery, the country is still exposed. “Crude remains the primary input, and higher international oil prices translate into more expensive production and distribution,” the report explained.
- A surge in international crude prices would therefore raise production and distribution costs.
“If oil becomes more expensive, the price of petrol in Nigeria—currently around N825 per litre—could rise to N1,000,” they projected.
According to the report, this would likely translate into higher transportation costs, feeding into broader inflationary pressures.
The situation, they revealed, may be worsened by climate-related challenges and rising insecurity.
Nigeria’s third-largest import
In the first quarter of 2025, Nigeria spent N1.19 trillion importing crude oil, making it the country’s third most imported commodity for the period, according to the National Bureau of Statistics (NBS).
This is despite Nigeria being Africa’s largest oil producer, a contradiction largely caused by limited and inconsistent crude supply to local refineries.
The figures were disclosed in the NBS’s Foreign Trade in Goods Statistics report for Q1 2025.
- The imported crude—listed as “Petroleum oils and oils obtained from bituminous minerals, crude,”—made up 7.7% of total imports.
- It was only behind gas oil, which cost N1.83 trillion, and motor spirit (PMS), valued at N1.76 trillion.
This reflects a growing dependence on foreign crude, as local refineries struggle to get a steady supply from domestic sources.
- As a result, many operators are turning to the international market for more reliable and economically viable alternatives.
Crude oil market trend
Crude oil prices, as tracked by Brent, are trading above $74 per barrel, while Nigeria’s oil blends have crossed the $75 mark, as tensions between Israel and Iran fuel volatility in global markets.
So far in July, oil has surged over 18%, clawing back losses from April when prices sank to $61 per barrel.
With the conflict still unfolding, Brent futures may attempt to hold above $75, with a possible push toward the $80 mark if geopolitical risks intensify.
- The Israel-Iran standoff has stretched into its fifth day, with continued airstrikes and rising civilian casualties in high-risk areas.
According to reports, at least 224 people have died in Iran since the clashes began, while 24 fatalities have been recorded in Israel.
