Israel-Iran Turmoil Threatens Nigeria’s Fragile Trade Routes Amid Global Oil Shock
As tensions between Israel and Iran escalate into a broader regional crisis, Nigeria is beginning to feel the tremors through fragile trade routes, rising energy costs, and fears of wider economic disruption. Analysts warn that unless diplomatic breakthroughs are achieved, the Middle East conflict could unravel already strained global logistics and trigger long-term damage to Nigeria’s economy.
The latest flashpoint came last week when Iran’s parliament approved the symbolic closure of the Strait of Hormuz, a narrow maritime chokepoint through which nearly a quarter of the world’s oil supply passes. Though Iran has not fully enforced the closure, the threat alone has sent oil prices surging past $95 per barrel, pushing Nigeria’s Bonny Light crude up in tandem.
While rising crude prices might seem like a win for Africa’s largest oil exporter, experts caution that Nigeria’s aging infrastructure and limited production capacity mean the country may not fully capitalize on the boom.
“Nigeria is barely producing 1.4 million barrels per day, far below its potential,” said energy economist Ijeoma Odu. “Higher prices help with short-term revenues, but our refining gaps and import dependence mean domestic fuel costs could spiral.”
Indeed, the country’s downstream sector is already feeling the pressure. Diesel and petrol prices have climbed over 15% in major cities in the last two weeks, according to the National Bureau of Statistics. Inflation, already hovering near 28%, is expected to worsen.
The conflict is also amplifying bottlenecks in maritime logistics. With major shipping companies rerouting vessels away from the Red Sea and Middle Eastern airspace, Nigeria’s importers are facing longer delivery times and higher freight costs.
“Goods that used to take 25 days from Asia now take over 40,” said Tunde Fashola, a logistics manager based in Apapa Port. “Container charges have jumped by 40% and this will hit consumers soon.”
Air cargo carriers are not spared. With Middle Eastern skies turning into no-fly zones, airfreight between Europe, Asia, and Africa is rerouting via longer, costlier paths delaying vital medical and electronic imports into Nigeria.
Beyond the trade and energy implications, the geopolitical ripple effects are putting a chill on investment sentiment. Nigeria, already grappling with insecurity and forex instability, now faces added scrutiny from foreign investors wary of global uncertainty.
“The flight to safety is real,” said Emeka Nwosu, an investment banker in Abuja. “Risk premiums are rising, and portfolio investors are cautious about deploying capital in frontier markets like Nigeria during regional conflicts.”
There are also concerns that the turmoil could embolden extremist elements in West Africa, as attention and resources are diverted elsewhere.
In April, President Bola Tinubu joined other African leaders in calling for de-escalation between Israel and Iran. So far, Abuja has remained diplomatically neutral, focusing on cushioning the domestic fallout.
Government officials say they are exploring alternative shipping corridors, reviewing import insurance policies, and encouraging oil production ramp-ups to take advantage of high crude prices.
“We are watching developments closely and will act decisively to protect Nigeria’s trade and economic interests,” said a spokesperson from the Ministry of Trade and Investment.
For Nigeria, the Israel-Iran conflict is a stark reminder of the vulnerabilities that come with reliance on external trade routes and crude oil earnings. Analysts urge the government to use the crisis as a pivot point to diversify exports, invest in infrastructure, and strengthen internal supply chains.
As global tensions rise, Nigeria must navigate this storm carefully, balancing its position as a major oil exporter with its role as a vulnerable import-dependent economy.
