Lagos, Nigeria – The Nigerian Economic Summit Group (NESG) has projected that escalating geopolitical tensions in the Middle East could deliver a massive oil revenue windfall to Nigeria. The potential gain could reach N30.2 trillion ($20 billion USD) if the conflict between Iran and Israel becomes prolonged.
Okay News reports that the policy think tank disclosed this in a report titled “Boom Not Gloom: Nigeria’s Optimal Policy Response to the US/Israel-Iran War,” released on Thursday. The report assesses the potential economic impact of rising tensions involving the United States, Israel, and Iran on oil-producing economies such as Nigeria.
The group stated that the conflict presents Nigeria with a rare but time-sensitive opportunity to strengthen its macroeconomic position by leveraging rising oil prices. The Central Bank should avoid reactive tightening to transitory supply shocks, sterilize excess liquidity, and allow the naira to adjust to market fundamentals.
The benefits of higher oil prices could be substantial but would depend largely on how policymakers respond. In the event of a short-lived conflict that temporarily lifts crude prices, Nigeria could record an additional N2.3 trillion in oil revenue.
If hostilities persist and significantly disrupt global energy markets, additional earnings could rise to as much as N30.2 trillion. Higher oil export revenues could also strengthen Nigeria’s external reserves and support stability in the naira through improved foreign exchange inflows.
However, rising global energy prices could push Nigeria’s headline inflation higher by between 1.3 and 5.2 percentage points. Rising fuel and transportation costs could increase domestic inflation and put pressure on supply chains.
The think tank advised policymakers to save excess oil revenues and ring-fence windfall gains to strengthen fiscal buffers. The report warned that the run-up to the January 2027 election cycle could test the government’s commitment to fiscal discipline.
Past oil booms in Nigeria have often triggered pro-cyclical spending that weakened long-term fiscal sustainability.
Oil prices surged on Thursday as Iran intensified attacks on oil and transport facilities across the Middle East. Brent crude futures rose $4.47, or 4.86%, to $96.45 per barrel, after briefly touching $100 earlier in trading. To help stabilize markets, the International Energy Agency has agreed to release a record 400 million barrels from strategic reserves.
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