Rising Middle East tensions following U.S. airstrikes on Iran’s nuclear facilities are expected to push global oil.
Rising Middle East tensions following U.S. airstrikes on Iran’s nuclear facilities are expected to push global oil prices above $90 per barrel, offering short-term relief for Nigeria’s naira but also fueling inflation risks.
“For us, escalation means that oil prices will now flirt at $100 a barrel,” said Ikemesit Effiong of SBM Intelligence. “The naira will strengthen a little bit… as the uncertainty of an Iranian reaction… heightens.”
Brent crude stood at $77.01 on Sunday, with Nigeria’s Bonny Light at $78.62. A surge in prices may boost Nigeria’s foreign reserves and fiscal revenue but could worsen domestic inflation.
“The fiscal side may benefit… but the inflationary side could be problematic,” said economist Temi Adebayo.
SBM Intelligence warned that Nigeria’s weak oil production and infrastructure may limit gains. Samuel Sule of Renaissance Capital Africa noted, “This is potentially positive for the naira… but global trade will continue to be impacted.”
Inflation in May stood at 22.97%.