…says Middle East crisis threatens Nigeria’s fiscal gains
Pedro Omontuemhen, the Oil & Gas Leader for West Africa at PwC Nigeria has warned that domestic refining cannot fully insulate the economy from a total global supply chain collapse.
Speaking on CNBC Africa’s Closing Bell, Omontuemhen explained that Nigeria’s current output of 1.5 to 1.6 million barrels per day cannot be scaled rapidly enough to fill the global gap.
He explained that even with the Dangote Refinery now refining local and imported crude at a capacity of 650,000 barrels per day, Nigeria cannot be shielded from global suplly shocks.
He also noted that the escalating Middle East conflict threatens Nigeria’s fiscal gains with a massive inflationary hit to its citizens.
This disparity is already visible at the pumps in Lagos, where petrol prices have climbed as high as ₦940 per litre, a figure that is expected to be even steeper in the country’s interior.
The volatility of the global market has been further underscored by Goldman Sachs’ decision to hike its Q2 2026 price forecasts for Brent and WTI by $10 and $9 respectively, yet Omontuemhen warned that these projections could be conservative if the conflict broadens.
He noted that the involvement of other global powers or direct hits on production facilities in Iran and Saudi Arabia could drive prices toward the $150 mark.
This potential for a global supply shock is exacerbated by the fact that tanker traffic through the critical Strait of Hormuz has effectively stalled due to attack fears, a bottleneck that handles roughly 20% of the world’s oil supply.
Despite the high-price environment, Nigeria remains unable to fully capitalize on the surge through increased export volumes because the country lacks the spare capacity to raise production levels overnight.
While the federal government stands to see a significant revenue windfall due to global oil prices rallying far above the $64 budget benchmark, the immediate reality for the average Nigerian is a crushing increase in the cost of living.