The war that began when the United States struck Iran on 28 February 2026, in coordination with Israel, has upended global energy markets in ways that reach well beyond the Gulf. For Nigeria, the disruption carries both a significant fiscal opening and a set of familiar dangers.
Tehran responded to the American strikes by targeting US interests across the Gulf, including in the UAE, Bahrain, Qatar and Kuwait, and by closing the Strait of Hormuz. The closure stranded more than 150 oil tankers outside the strait, which normally carries approximately 21 million barrels of oil per day. Brent crude, which had already climbed to $72.87 at conflict outbreak, a seven-month high, now faces projections of $100 to $150 per barrel if disruptions persist. Nigeria's 2026 budget was benchmarked at $64.85 per barrel.
Nigeria sits at an unusual angle to this crisis. Its crude reaches buyers in Spain, India and France via Atlantic shipping lanes, insulated from the Hormuz disruption that has paralysed Gulf exporters. At current production of around 1.47 million barrels per day, according to Organisation of the Petroleum Exporting Countries (OPEC) figures, even a sustained price spike translates directly into significant revenue gains. Stakeholders have estimated that the country could earn an extra $1.3 billion in crude sales in March alone if prices reached $100 per barrel, about $29 additional per barrel over its then-current price. Across a longer horizon, the Nigeria Economic Summit Group (NESG) projects additional oil revenues ranging from roughly ₦2.3 trillion under a short-lived shock to as much as ₦30 trillion if the conflict becomes prolonged. The group has described the US-Israel campaign as the most significant global energy shock since the Russia-Ukraine war.
The $20 billion Dangote Refinery in Lagos has emerged as a striking early beneficiary. The facility became fully operational just weeks before the US bombed Iran. Its owner, Aliko Dangote, 69, is now more than $5 billion richer since the war began. The refinery was described as the world's single largest exporter of jet fuel in April and May 2026. Last month it was Europe's largest supplier of jet fuel and diesel, and jet fuel shipments from the facility reached the US market for the first time this year.
Nigeria's Minister of State for Petroleum Resources, Ekperikpe Ekpo, has moved to capitalise on the moment. He has set targets of 10 billion cubic feet (BCF) of gas per day by 2027 and 12.5 BCF per day by 2030, and is seeking to bring 20 gas projects to final investment decisions before 2030. An intergovernmental agreement for a Nigeria-Morocco gas pipeline, which would carry Nigerian gas northward across West Africa and onward to Europe, was signed last month by presidents from the West African sub-region. Nigeria is positioning its liquefied natural gas (LNG) for growing European demand that the Iran crisis has accelerated. Minister Ekpo has also cited efforts to move millions of Nigerian households away from firewood, charcoal and kerosene, and to reduce gas flaring.
The opportunity arrives with familiar complications. Domestic petrol prices, which averaged N1,036 per litre in January, risk rising to N1,200 per litre if crude prices sustain above $100 per barrel, reigniting inflationary pressure even as local refining capacity has improved. High cooking gas, or liquefied petroleum gas (LPG), prices already weigh on Nigerian households. A simultaneous rise in pump prices and LPG costs would erode any fiscal dividend for ordinary consumers, even as government revenues climb.
Governance analysts have raised broader concerns. Without transparent crude accounting, effective oversight, and consistent policy implementation, Nigeria risks repeating a boom-bust pattern in which oil windfalls are absorbed into inefficiencies rather than delivering macroeconomic stability. The NESG echoes those warnings, and whether the government will channel revenues into fiscal buffers and debt reduction or expanded recurrent spending remains an open question.
Several other uncertainties compound the picture. Whether Nigeria can scale up crude production within OPEC limits fast enough to capture additional market share from disrupted Gulf suppliers is unclear. The actual incremental LNG volumes Nigeria can deliver to Europe, and the timeline for new gas projects reaching final investment decisions, are not yet established. The Nigeria-Morocco pipeline intergovernmental agreement is a political commitment; its final route, financing structure, and construction timeline remain to be determined.
Nigeria's geographic position gives it a structural advantage in this crisis that Gulf producers cannot share. Whether its institutions can translate that advantage into durable improvement is the question its recent history has answered poorly.
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