By CHRISTIAN BISKA
The conflict between the United States and Iran, which began in February 2026, has triggered sharp fluctuations in global crude oil prices, creating instability in the international energy market. The volatility has resulted in a significant increase in the prices of petroleum products, particularly Premium Motor Spirit (PMS), popularly known as petrol, in Nigeria.
The ripple effects have been felt across the economy. Since transportation and production costs are closely tied to fuel prices, any increase in the price of petrol inevitably drives up the cost of goods and services. Producers pass on higher operating costs to consumers, while households struggle with declining purchasing power and rising living expenses.
Since the outbreak of the conflict and the disruption of activities around the Strait of Hormuz—one of the world’s most strategic oil shipping routes—Nigerians have endured mounting economic hardship. Many have therefore hoped for a lasting ceasefire between the US and Iran that would stabilise global oil prices and ease the pressure on domestic fuel costs.
Following a deliberate ceasefire between the two countries some months ago, global crude oil prices declined significantly, prompting modest reductions in the prices of PMS in some parts of the world. The development offered temporary relief as lower fuel prices reduced production costs and created the prospect of lower prices for goods and services, thereby improving consumers’ purchasing power.
However, the respite proved short-lived. Oil prices remained volatile, reflecting continued uncertainty over the durability of the ceasefire.
In Nigeria, expectations that marketers would reduce petrol prices in line with falling crude oil prices were largely unmet. Consumers also anticipated a decline in transportation fares and the prices of essential goods, but these expectations have not materialised. Instead, the economic strain has persisted despite negotiations aimed at sustaining peace between the US and Iran.
Those hopes were further weakened by President Donald Trump’s remarks on Wednesday, July 8, 2026, during the ongoing NATO Summit in Ankara, Turkey.
President Trump reportedly stated that the Memorandum of Understanding (MoU) with Tehran “is over,” although he added that negotiators were free to continue discussions if they wished. He also suggested that the United States could launch fresh strikes against Iran after the two countries exchanged overnight air attacks.
In addition, he was quoted as saying that he might reimpose a naval blockade on Iran following attacks on commercial vessels near the Strait of Hormuz. The US President also expressed doubts about the prospects of a permanent truce or peace agreement with Iran.
These developments could have far-reaching consequences not only for Iran but also for the global economy. In Nigeria, where prices often remain high even after the factors responsible for increases have eased, renewed tensions could further worsen the country’s cost-of-living crisis.
Reports indicate that President Trump’s latest comments have already contributed to a five per cent increase in crude oil prices, underscoring the fragility of the global energy market. Should the conflict escalate, higher crude oil prices would almost certainly translate into increased production and transportation costs, which businesses would ultimately pass on to consumers through higher prices for goods and services.
For millions of Nigerians already grappling with inflation and declining purchasing power, such a development could prolong economic hardship. The country’s experience has shown that once prices rise, they rarely return to previous levels, even when market conditions improve.
It is, therefore, imperative for governments at the local, state and federal levels to adopt deliberate and proactive measures to cushion the likely impact of renewed tensions in the Middle East. Such interventions could include reviewing the national minimum wage, strengthening social protection programmes, providing targeted palliatives and implementing broader economic policies aimed at reducing the burden on households and businesses.
Until a lasting and mutually acceptable peace agreement is reached between the United States and Iran, uncertainty is likely to persist in the global oil market. Nigeria must, therefore, prepare for the possibility of prolonged economic challenges while pursuing policies that protect the welfare of its citizens and strengthen the resilience of the economy.