Transmission channels to Nigeria’s crude oil prices have experienced significant volatility since the start of the conflict, rising between 35% to over 50%, driven primarily by disruption in the Strait of Hormuz.
By Ola Kay
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has stated that nation’s economy is in shock, as many countries of the world now face the aftermath of current Middle East war.
A statement by Special Adviser on Media and Communications to the Minister, Dr. Ogho Okiti, emphasized that the shock comes on the heels of recent economic reforms targeted at strengthening the country’s economic foundations towards lifting millions out of poverty.
Just days ago, the International Monetary Fund, IMF, in a statement ahead of the 2026 Spring Meetings starting from Monday, April 13, said it anticipates up to $50 billion in emergency financing may be needed for countries affected by balance-of-payments shocks.
Reports confirm that more than 1,000 delegates from 190 countries will be arriving in Washington DC for the World Bank and IMF Spring Meetings. The 2026 spring meeting has as its theme “Anchoring Stability and Promoting Balanced Growth,”coming amidst new headwind: the economic fallout from the Middle East war.
The 2026 IMF/World Bank Spring Meetings take place at a moment of heightened global uncertainty.
Mr. Edun who is the head of Nigeria’s delegation to the Spring Meetings in Washington, maintained that at a critical time of economic transition, “the shock compounds high fuel prices, increasing food costs, and broader inflationary pressures, and places further strain on households and businesses.”
The US–Israel–Iran conflict has bred a major external shock, negatively affecting energy markets, tightening global financial conditions, and introducing renewed inflationary pressures across advanced and emerging economies.
According to Edun, the government is trying to accelerate economic growth in a difficult environment shaped by external shocks and domestic price and inflation pressures. Despite the realities, he stressed that government is determined to grow the country’s macroeconomic stability and attract and scale investments required to lift millions out of poverty.
He said:“As an oil producer, the government recognises that a longer duration of the conflict means improvements in foreign earnings and fiscal revenues. However, the shock comes as Nigeria seeks to strengthen its macroeconomic stability and resilience.”
But he identified three key channels through which the crisis pose risks to the Nigerian economy- Fuel, Diesel And Gas Prices
Volatility in global energy markets is already influencing domestic energy-related commodities, with direct implications for prices and the standard of living of Nigerians.
Petrol prices rose by over 50%, from about N890 – N900 to N1260 – N1330. b. Diesel prices have surged by over 70%, from N1,100 per litre to about N1,550 at the peak.
It is also observed that heightened geopolitical risks often trigger shifts in global investment patterns, with investors moving toward safe-haven assets. These dynamics may affect capital flows into emerging markets, including Nigeria, as well as broader financial market conditions.
Global Logistics And Supply Costs
Disruptions to major shipping and energy supply routes could raise international freight and logistics costs, which may translate into higher import costs and increased pressures on domestic prices.
In terms of Nigeria’s Policy Response, the Minister of Finance noted that early and decisively, the Federal Government emphasises that Nigeria enters this period of global uncertainty from a position of strengthened economic fundamentals, compared to recent economic shocks such as the Covid – 19 and the Russian / Ukraine war shocks, following a combination of macroeconomic reforms since May 2023.
Quoting from available latest data. Edun said: “In the last few weeks, the government has strengthened the country’s economic position in response to the crisis by continuously looking for ways to improve oil production, now 1.86 mbpd.”
According to him, the is to help optimize Nigeria’s crude oil revenues, foreign exchange earnings, and fiscal revenues.
He listed other economic strengthening measures, such as the Naira for Crude policy to safeguard domestic fuel production and supply to ensure no further strain to households and businesses due to fuel and diesel shortages.
“Continue to maintain a liberalised foreign exchange market to ensure continuous smooth capital flows. The policy has been validated by Nigeria’s reclassification as a Frontier Market by FTSE Russell, effective from September 2026.
“Improved and continuous close coordination across fiscal, monetary, and trade policies resulting in the recent tariff changes that reduce tariffs on critical industrial inputs to support production and expand international trade.
“These actions reflect a government focused on stabilisation, resilience, and growth continuity”, he said.
Edun warned that Nigeria is not insulated from the current global crisis, and nevertheless, the nation is significantly more resilient.
“The reforms have better positioned Nigeria to navigate the challenges posed by the current geopolitical crisis”, he added, noting that the next phase of Nigeria’s economic strategy focuses on scaling private investment, unlocking domestic capital markets, driving job-rich growth, and leveraging regional integration (AfCFTA).
‘The government remains resolute and working harder to maintain macroeconomic stability, attract investments to drive inclusive growth, and invest in human capital and social protection, he stated.
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