By Felix Olukayode
Global oil prices surged again after Iran launched new missile attacks on U.S. forces in the Middle East, abruptly ending days of relative calm and reminding markets how quickly hopes of peace can fall apart.
Brent crude rose more than 4 percent, reversing part of the sharp decline seen only days earlier after Washington and Tehran appeared to pause hostilities for renewed diplomatic efforts. The latest escalation highlighted a reality that has increasingly unsettled energy markets: every ceasefire has proved fragile, and every breakdown triggers traders to rush back into oil.
At the center of the crisis is the Strait of Hormuz, the narrow waterway between Iran and Oman through which about one-fifth of global oil and liquefied natural gas supplies pass. Even the threat of disruption is enough to shake markets.
Commercial shipping through the strait has become more unpredictable as tankers assess the risks posed by military actions and repeated Iranian warnings. Insurance premiums have increased, freight costs have risen, and energy markets have become highly sensitive to every military development.
Much of the uncertainty comes from conflicting signals from Washington. President Donald Trump has repeatedly expressed a preference for diplomacy and wants Tehran to return to negotiations, while also warning that the United States is ready to launch further military strikes if needed.
These mixed messages have left traders increasingly skeptical that any pause in fighting will last.
As PVM oil analyst John Evans noted, “The market seems to be forever seeking good news,” reflecting an industry that has endured months of false starts and short-lived ceasefires.
The effects go far beyond oil prices.
When crude prices swing sharply in just days, governments struggle to prepare budgets, airlines and manufacturers face rising operating costs, and central banks find it harder to control inflation. Even when prices later stabilize, higher shipping, insurance, and freight costs often keep fuel and consumer prices high.
For Nigeria, the conflict creates a complex paradox.
Higher crude prices boost government revenue because oil remains Nigeria’s biggest export. Analysts estimate that Nigeria has earned trillions of naira more than initially projected as crude prices stayed above budget estimates, providing much-needed fiscal relief after years of revenue pressure.
But the country cannot fully capitalize on this windfall.
Crude production remains around 1.5 to 1.6 million barrels a day, well below the government’s target of 2 million barrels daily. As a result, Nigeria gains from higher prices but not as much as it could if production were higher.
More importantly, what benefits government finances often harm ordinary Nigerians.
According to the Major Energies Marketers Association of Nigeria (MEMAN), Nigeria experienced one of Africa’s sharpest increases in petrol prices during the first half of 2026. The association attributes much of the increase to supply disruptions caused by the Middle East conflict, which forced many vessels to avoid the Strait of Hormuz and instead sail around the Cape of Good Hope—a significantly longer and more expensive route.
The increased transportation costs directly impact fuel prices.
During various points of the crisis, the Dangote Refinery also sharply adjusted its ex-depot petrol prices in response to fluctuating crude prices and foreign exchange rates, showing how quickly global market volatility now influences Nigeria’s domestic fuel market.
This transmission is much faster than before the subsidy removal.
Since petrol prices were fully deregulated in 2023, international crude prices and exchange rates increasingly determine what Nigerians pay at the pump. Without fuel subsidies to cushion external shocks, rises in global oil prices now reach consumers almost immediately.
The impact extends far beyond petrol stations.
Higher fuel prices raise transportation costs, push up food prices, increase production expenses, and reduce household purchasing power. Businesses face higher operating costs, and families spend more just to move around and buy essentials.
In essence, a conflict happening thousands of kilometers away in the Persian Gulf quickly influences markets in Lagos, Kano, Port Harcourt, and every community relying on road transport.
This is the paradox of Nigeria’s oil economy.
The country earns more when oil prices climb, yet millions of citizens often become worse off because the same global shocks make transportation, food, and other essentials more expensive.
Until Washington and Tehran can replace temporary ceasefires with a lasting political solution, oil markets are likely to stay volatile. For Nigeria, this probably means a cycle of higher government revenues on one hand and rising living costs on the other.
Ultimately, the true cost of instability in the Middle East isn’t just measured in barrels of oil or government earnings, but also in what ordinary Nigerians pay each time they fill up at the pump or shop in their local markets.