When the Iran–US war started on February 28, 2026, Nigerians were less concerned. They went on with their daily activities and businesses with maximum concentration.

Little did they know their source of livelihood would be affected in the long run.

Two weeks later, the narrative changed when the Strait of Hormuz was closed by Iranian forces.

Shutting down the narrow waterway through which roughly 20% of the world’s oil supply flows immediately led to a global shortage of crude oil.

Expectedly, the scarcity resulted in a hike in the prices of the limited available resources as crude prices surged to $100 per barrel.

As the war continues to disrupt global crude oil supply, Nigerians are already feeling the heat as local filling stations quietly updated their price boards.

At the time of this report, petrol sells for between ₦1,200 and ₦1,300 per litre in many parts of the country, including Kano and Sokoto States.

In case you are wondering what exactly is happening and what a war in the Middle East has to do with the fuel in your tank, you are right on time because this report explains everything all Nigerians should know.

IRAN–US War’s Impact on the Strait of Hormuz

The Strait of Hormuz is a narrow chokepoint at the mouth of the Persian Gulf, which serves as a pathway for an estimated 21 million barrels of crude oil daily.

Knowing the importance of this pathway to the amount of crude supplied to the US, Iran closed the strait in retaliation for the American airstrikes.

The decision automatically saw Brent crude move from $70 per barrel to $100 in the second week of March.

However, while low oil-producing countries will be greatly affected, oil-producing nations like Nigeria are tipped to benefit from the higher crude prices because more exports mean more money.

With Nigeria budgeting $64.85 per barrel, the price surge is an opportunity for the country to earn more dollars on every exported barrel.

Unfortunately, while there are potential benefits, the disadvantages seem more evident than the advantages.

Nigeria: Producer on Paper, Importer in Practice

Despite being Africa’s largest oil producer, Nigeria imports most of its refined petroleum products, including petrol, diesel, and jet fuel.

This means the country pays more to buy refined fuel at inflated global prices even as it earns more from selling crude at $110 per barrel.

Hence, the profits Nigeria makes from exporting crude oil to the global market are immediately eaten up by a larger import bill on the other side.

Speaking in a webinar hosted by the Major Energies Marketers Association of Nigeria (MEMAN), the Chairman, Huub Stokman, described the situation as a “double-edged reality” that creates opportunities for producers while intensifying pressure on downstream operators and consumers.

Stanislas Drochon, Head of Fuels and Refining at S&P Global Energy, shared a similar sentiment when he warned that Sub-Saharan Africa remains highly vulnerable due to its import dependence, weak refining capacity, and limited storage infrastructure.

“Energy security is not just about supply. It is about reliability, affordability, and accessibility, requiring sustained investment across the entire value chain,” he said.

Nigerians Lament Increasing Fuel Prices

This isn’t the best of times for Nigerians as fuel prices keep increasing, influencing the cost of commodities in the markets.

The cascade of price increases began almost immediately after the war broke out. On March 4, 2026, NNPC raised its pump price to ₦937 per litre, while the Dangote Refinery followed by increasing its ex-depot gantry price from ₦774 to ₦874.

By mid-March, Dangote Refinery had hiked prices three more times, pushing pump prices past ₦1,200 in many locations.

Unsurprisingly, the largest private refinery in Nigeria publicly defended the hikes, stating it was receiving only five instead of 13 crude cargoes per month from NNPC.

“The high crude cost is compounded by the fact that Nigeria’s upstream producers have failed to supply crude oil to the refinery as required,” the company stated.

For Nigerians on the street, these numbers mean fuel scarcity, increased transport fares, expensive petrol and diesel, and overall hardship.

Meanwhile, experts warned that this might be the beginning of another turbulent time for Nigerians. Speaking on Channels TV, Economist Paul Alaje of SPM Professionals said: “If PMS is ₦1,000, you can imagine what diesel will be; what flight tickets will be. It will affect the poor, the middle class, and, of course, the rich.”

Can Nigeria Capitalise on the Global Windfall?

For the windfall to truly benefit Nigeria, the country must pump and export more oil to foreign countries.

Unfortunately, it’s easier said than done, as the country rarely produces more than 1.6 million barrels per day.

Hampered by pipeline vandalism, oil theft, aging infrastructure, and years of underinvestment, Nigeria couldn’t meet its production target of 2.06 million barrels per day in 2025.

Nonetheless, the government is reportedly considering ways to boost its crude oil production and benefit more from the increased global crude oil prices.

The Federal Government’s Economic Management Team (EMT) disclosed to The Nation newspaper that: “The EMT is doing an assessment of this to determine the options.”

The Dangote Refinery: The Slim Ray of Hope

Though Nigerians had endured multiple oil price crises in the past, something is different this time, as the Dangote Refinery pledged to prioritise the Nigerian domestic market even as global supply tightens.

David Bird, Managing Director of the Dangote Refinery, reassured Nigerians during a media chat in March 2026 that the company would do everything to meet the daily fuel needs of Nigerians as long as the government provides maximum support.

“With government support and steady access to domestic crude, Dangote Refinery will continue to meet all of Nigeria’s refined fuel requirements,” he said.

It’s one thing to make a promise but another to fulfil it. Many critics aren’t convinced or confident in the company’s ability to supply the country with affordable and accessible refined fuel.

“Dangote hiked the pump price of fuel by over 100% due to the war in Iran. Yet, the Dangote Refinery purchases crude oil domestically from Nigeria,” Nigerian activist Deji Adeyanju lamented.

How Does this Translate to Energy Costs or Affect the Energy Sector

 

Conclusion

The war between the US, Israel, and Iran is still very much ongoing at the time of writing, and it keeps influencing crude prices.

Brent crude settled at $112.19 per barrel on March 20, its highest point in the war so far.

For Nigeria, the people will experience continued fuel price pressure, rising food costs, and higher transport fares, regardless of how much the government earns on crude exports.

Until the country resolves its structural dependency on imported refined products, the negative impacts of the Middle East war will override its benefits.