March 08, (THEWILL) — The probability that the Iran vs. US-Israel standoff will degenerate into a full-blown conflict is no longer a scenario, but a clear fact unfolding in real time.
As of Sunday, 1 March 2026, the American and Israeli bombs struck Iran across 24 of its 31 provinces. Supreme Leader Ayatollah Ali Khamenei is dead, killed in an airstrike on his compound in Tehran. Some of his top security commanders died with him. Iran launched six waves of retaliatory strikes against 27 US military bases across the Gulf and Israeli military targets.
The Strait of Hormuz, through which approximately 20 percent of the world’s oil and c. 21per cent of its LNG passes through every day, is effectively closed. Tankers are turning back. Insurance cover has been pulled. Nine LNG carriers have already been diverted. Dubai International Airport, the world’s busiest international hub, is shut indefinitely.
Markets reopen on Monday
For the global energy system, this will count as one of the most consequential disruptions since the 1973 Arab oil embargo. For Nigeria, it is a test. A test of whether we’ve learned anything from the cycles of oil price windfalls that have passed through this country without leaving lasting structural gains behind. The answer to that question will be written in the decisions made over the next 30 days.
The Risk Picture is Two-Sided and We Must Hold Both Sides
Brent crude closed on Friday, 27th February at $72.48 per barrel, already carrying an $8 to $10 war premium built up over weeks of military escalation. Analysts have projected a Monday open somewhere between $80 and $100, depending on how the Hormuz situation develops over the weekend. If this conflict extends over weeks, which is the operating assumption given that Trump has described it as a regime change campaign to run “throughout the week or as long as necessary,” the $100 scenario may become a base case assumption.
The arithmetic for Nigeria is straightforward. At current production levels of approximately 1.5 to 1.6 million barrels per day, every $10 increase in Brent adds roughly $3 to $4 billion in incremental annual revenue to the sector, with a lot of it going to the federal accounts. For a government managing the aftermath of fuel subsidy removal, a fiscal deficit, and Naira stabilization pressures, this is meaningful. It buys time on the reform agenda & strengthens the external reserves position that have been painstakingly rebuilt since 2023.
But the downside deserves equal weight. The Dangote refinery has changed the calculus materially, but it does not fully insulate the downstream from international price movements. At $85 to $100 crude, pump prices will face renewed upward pressure. The Naira’s hard-won stability could erode as import bills rise across fuel, food, and industrial inputs. Freight costs on shipping routes adjacent to the Gulf will increase as carriers reprice war risk premiums.
There is also a subtler risk that deserves serious attention. The Hormuz closure is already disrupting LNG flows from Qatar and the UAE, which together account for approximately 20% of global LNG supply. Nigeria competes with both countries in European and Asian gas markets. The Hormuz disruption, if extended, creates a material supply gap that Nigerian LNG is well positioned to help fill.
The question however is whether Nigeria has the upstream supply reliability to keep NLNG full, the infrastructure headroom, and the commercial agility to capture this opportunistic spot demand when it materializes. That question does not have a comfortable answer at the moment. And it brings us to what Nigeria must do.
What Nigeria Must Do: Four Priorities
The instinct in moments like this is to celebrate the revenue upside and wait. We have been here before. The 1970s boom, the first Gulf War windfalls in the early 90s, the 2005 to 2008 surge etc. Each of these windfall waves were followed by debt, structural decay, and the familiar shock of the price reversal that followed.
This time must be different, not because the sentiment has changed, but because the structural tools available to Nigeria today, the PIA framework, the newly independent regulators, the Dangote refinery, the gas masterplan, are more capable of converting a price window into lasting institutional progress than anything available in prior cycles. But only if we move.
Priority one is production maximisation. Every barrel Nigeria does not produce and sell at $85 or above is revenue permanently lost. Nigeria’s current production trajectory is improving but remains fragile. Average output in Q2 2025 was approximately 1.68 million barrels per day, well below the government’s target of 2 million barrels per day. That gap represents real money at current price levels.
Regulators, operators, JV partners, and NNPCL must treat production maximisation as the single most urgent commercial priority from today. That means accelerating workovers, fast-tracking well interventions, resolving surface facility constraints and addressing any operational bottlenecks limiting output. It also means treating security of infrastructure as an economic emergency. Every day of pipeline downtime at $90 crude is not an operational inconvenience, but a quantifiable loss to the Nigerian Federation.
Priority two is revenue capture. Nigeria has a documented history of being caught on the wrong side of price cycles, producing into a rising market without the hedging or forward sale structures needed to protect revenue when the price reverses. This price window may be short. Military campaigns of this kind, as the June 2025 Operation Midnight Hammer demonstrated, can resolve faster than the market anticipates once the strategic objectives are achieved, or be dragged into a prolonged engagement that becomes unpredictable in its own way. Neither outcome is within Nigeria’s control.
What is within our control however, is how we monetize the price environment while it exists. The Ministry of Finance, NNPCL, and the relevant fiscal authorities need to be actively working the hedging and forward sale question today, not after the conflict resolves. Stanbic, Access, and similar institutions with commodity desk capacity can support this. The credit and liquidity facilities backed by current forward prices should also be explored. We have had price windfalls before that slipped through institutional fingers because the structures were not in place when they were needed. That failure should not repeat itself.
Priority three is gas infrastructure acceleration. This crisis has done something that years of policy advocacy could not fully accomplish: it has made the geopolitical case for Nigerian gas infrastructure in a single weekend. Europe was already watching Nigeria after the Russian gas shock of 2022 forced a rapid diversification of supply. Asia was watching as Qatar’s Hormuz exposure became apparent. Both are watching again, this time with greater urgency.
Nigeria holds proven natural gas reserves of approximately 209 trillion cubic feet, among the largest on the African continent and globally significant by any measure. NLNG’s six-train facility at Bonny Island remains a world-class asset. Train 7 is under construction and will materially increase export capacity when it comes onstream.
The Ajaokuta-Kaduna-Kano (AKK) pipeline, when commissioned, will deepen domestic gas utilization for power and industry. The Trans-Saharan Pipeline, long discussed as a strategic corridor to Europe, now carries renewed geopolitical urgency.
The commercial logic for accelerating all of these projects has never been stronger. Gas assets that struggled to attract competitive financing terms before this weekend, if well packaged, can now attract greater interest from international capital allocators looking to diversify away from Gulf supply dependency.
Nigerian policymakers, project developers, and NNPCL must engage that capital interest proactively. The window to lock in investment commitments at favourable terms is not permanent. The moment the conflict stabilizes, risk premiums will compress and alternative supply routes will reopen. Nigeria must move while the structural case is being felt most acutely by buyers and investors alike.
Priority four is regulatory activation, and this may be the most consequential priority of all.
The Geopolitical Context Nigeria Cannot Ignore
Beyond the immediate market dynamics, this crisis has geopolitical dimensions that Nigeria’s policymakers must track carefully. The death of Khamenei represents the most significant leadership transition in the Islamic Republic since its founding in 1979.
Whatever follows will have lasting consequences for global oil supply. Iran produces approximately 3.2 to 3.4 million barrels per day and holds c. 9 per cent of global proven reserves. A protracted period of instability or a change in Iran’s production orientation could reshape the global supply picture for years.
For Nigeria, two implications stand out.
First, if Iranian supply is structurally disrupted over an extended period, oil prices at elevated levels become the new baseline rather than a temporary premium. That is a favourable fiscal environment for Nigeria, but it also means that the pressure to deploy revenues wisely will be sustained and scrutinised. The world will be watching to see if we use a prolonged revenue window to strengthen institutions, reduce debt, and fund infrastructure, or repeat the familiar patterns of the past.
Second, this crisis accelerates the energy security conversation that has dominated global gas markets since 2022. Europe’s structural need for non-Russian, non-Gulf gas supply is now more urgent than it has been at any point in the past decade. Nigeria’s position, as a West African producer with an existing LNG export infrastructure, a pipeline network capable of supporting trans-continental delivery, and a government that has signaled a clear intent to monetise its gas resources, is strategically compelling. That position must be actively leveraged, not passively held.
A Final Word On What This Moment Requires
Nigeria is not a passive actor in what is unfolding. It holds 37 billion barrels of proven crude reserves and some of the largest undeveloped gas resources on the planet. The Dangote refinery has fundamentally changed the downstream arithmetic. The PIA has restructured the regulatory environment. A new generation of indigenous operators has assumed ownership of assets across the value chain. The capacity to respond is present.
What has historically been missing has been the institutional urgency to act before the window closes. Oil price spikes don’t wait for budget committees, regulatory backlogs, or deferred production decisions. They arrive, they create a narrow window of extraordinary value, and they close. The countries that capture that value are the ones that had their systems ready and their decision-making aligned when the window opened.
The author, Afolabi Akinrogunde is a senior energy professional.
