March 31, (THEWILL) — Nigeria could benefit from rising global oil prices in the week ahead, although geopolitical tensions and mixed signals from global policymakers may introduce fresh volatility into financial markets.
This outlook was shared by Lukman Otunuga, the Head of Market Research at FXTM, who noted that oil benchmarks are on track for their strongest monthly gain since 1990.
According to Otunuga, growing concerns over supply disruptions have pushed crude prices toward triple-digit territory as the Strait of Hormuz remains effectively closed amid escalating tensions involving Iran and the United States. The tightening supply outlook has elevated oil benchmarks toward the $100 per barrel level, which he described as a key psychological threshold for both Brent crude and West Texas Intermediate crude.
For Nigeria, a net oil exporter, higher oil prices could translate into stronger external earnings and potential support for the naira. However, Otunuga warned that any gains may be partially offset if geopolitical tensions trigger a broader risk-off sentiment in global markets, which often pushes investors away from emerging economies.
Global markets began the week on a tense note after Iran accused the United States of preparing for a possible land assault even as Donald Trump reportedly sought diplomatic engagement to end the conflict. The situation marks another critical phase in the Iran war, now entering its fifth week, raising fears of further disruptions to global energy supply.
Some optimism returned to financial markets after The Wall Street Journal reported that Trump had told aides he was willing to consider ending the war against Iran. Nevertheless, Otunuga noted that repeated mixed messages from Washington and the continued closure of the Strait of Hormuz could heighten volatility as investors attempt to price in the uncertainty surrounding the conflict.
Despite the heightened geopolitical risk, Gold has fallen by almost 14 percent this month. The decline reflects pressure from a broadly stronger US dollar and diminishing expectations of imminent interest-rate cuts by the Federal Reserve. While recent comments by Fed officials have eased expectations of aggressive rate hikes, the stronger dollar has continued to weigh on bullion prices.
Otunuga noted that from a technical standpoint, $4,600 remains a key level for gold. A sustained break above this point could open the path toward $4,700 and $4,800, while weakness below the level may expose the precious metal to declines toward $4,450 and $4,300.
Beyond geopolitics, investors are also closely watching the upcoming March Non-Farm Payrolls report, which will offer fresh insight into the health of the US labour market. Market expectations suggest the US economy may have created about 65,000 jobs in March, compared with the 92,000 job losses recorded in the previous month. The outcome of the report could shape expectations around the Federal Reserve’s policy path, particularly as rising energy prices add complexity to the inflation outlook.
Currency markets are also monitoring movements in the Japanese yen, after the USD/JPY pair crossed the 160 level for the first time since July 2024. In 2024, the Japanese government intervened twice to defend the currency at similar levels. Otunuga noted that if history repeats itself and another intervention occurs, it could trigger a sharp sell-off in the pair.
He added that the ongoing Iran conflict may also fuel demand for safe-haven assets such as the yen, while oil price volatility could further influence the currency given that Japan imports about 90 percent of its crude oil from the Middle East.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
