Middle east tension: FG reviews naira-for-crude policy

The Federal Government has moved to insulate the domestic energy sector from global volatility by initiating a review of the Naira-for-Crude policy.

This move follows a coordination meeting chaired by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, aimed at assessing the immediate implications of escalating geopolitical tensions in the Middle East.

With the standoff involving the United States, Israel, and Iran threatening critical maritime chokepoints like the Strait of Hormuz, the government is prioritizing the local supply chain to prevent external price shocks from destabilizing the Nigerian economy.

The review of the Naira-for-Crude initiative, a policy designed to settle crude oil transactions for local refineries in the national currency is now a central component of the government’s defensive economic strategy.

By evaluating current energy market developments, the Economic Management Team (EMT) intends to ensure that the progress made in stabilizing the Naira and increasing domestic refining capacity is not undermined by rising global oil prices.

The Ministry of Finance in a statement on Wednesday noted that while global uncertainty is driving up the cost of fuel, diesel, and gas worldwide, the careful calibration of this policy could provide a necessary buffer for Nigerian businesses and households.

As the situation remains fluid, the EMT has identified three primary transmission channels through which the Middle East crisis could impact Nigeria: energy price volatility, shifts in international capital flows, and increased logistics costs due to disrupted shipping routes.

Despite these challenges, Edun maintained that Nigeria enters this period of uncertainty from a position of relative strength, citing a robust 4.07% GDP growth in the final quarter of 2025.

The Ministry assured the public that it remains proactive and vigilant, with all policy options remaining under continuous review to sustain the nation’s growth trajectory amid the unfolding global crisis.