Global crude oil prices have dropped by nearly two per cent as the Iran–United States–Israel conflict enters its third month, raising renewed expectations of a possible reduction in petroleum product prices in Nigeria.

Checks on Friday showed that Brent crude and West Texas Intermediate (WTI) recorded fluctuations during trading, with prices briefly surging earlier in the week before easing later in the day.

Brent crude stood at $87.30 per barrel, while West Texas Intermediate traded at $91.96 per barrel, reflecting a 1.80 per cent and 1.87 per cent movement respectively.

The decline follows a short-lived spike recorded between Wednesday and Thursday amid ongoing tensions in the Gulf region.

The development has strengthened expectations that fuel prices may ease in Nigeria, where pump prices have surged significantly in recent months due to global supply disruptions.

The crisis in the Middle East escalated after the United States imposed fresh sanctions on Iran linked to developments around the Strait of Hormuz, a critical global oil shipping route.

Since February 28, 2026, the conflict has disrupted global energy markets, with ripple effects across several economies, including Nigeria’s downstream petroleum sector.

In Nigeria, petrol prices have risen sharply to between ₦1,345 and ₦1,365 per litre, up from about ₦900 per litre earlier in the year.

However, local refining capacity, particularly from Dangote Refinery, has helped stabilize supply and support product availability across the country and parts of Africa.

Reports also indicate that Dangote Refinery recently reduced its automotive gas price to about ₦1,600 per litre from roughly ₦1,800, reflecting adjustments in response to global market movements.

Market analysts say sustained declines in crude prices could eventually ease domestic fuel pricing pressure, although exchange rate instability and logistics costs remain key determining factors.

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Fuel prices may decline in the coming days as global crude oil prices continue to fall following ongoing peace talks between the United States and Iran, raising optimism in global energy markets.

Oil prices dropped from about $111 last week to $97 per barrel on Monday morning, signalling a sharp reversal after months of volatility driven by geopolitical tensions in the Middle East.

Oil Price Decline Follows Diplomatic Progress

Brent crude had previously hovered between $103 and $105 per barrel, supported by fears surrounding the conflict between the United States and Iran.

However, renewed diplomatic engagement and reports of progress in peace talks have triggered a significant market correction, with prices sliding to $97.48 per barrel.

Analysts say the decline reflects expectations that the Strait of Hormuz, a key global oil transit route, may soon reopen under a potential US–Iran agreement.

Impact of Middle East Conflict on Oil Prices

Crude oil prices had surged above $100 per barrel after tensions escalated between the United States and Iran in late February.

At the peak of the crisis, prices crossed $115 per barrel, causing ripple effects across global fuel markets.

In Nigeria, petrol prices rose from around N830 per litre to about N1,300, while diesel and aviation fuel also recorded sharp increases, putting pressure on households, transport operators, and airline companies.

Nigeria Watches as Global Prices Decline

With crude prices now trending downward, market observers say there is growing speculation that fuel prices in Nigeria could ease if the decline continues.

There are also expectations that the Dangote Petroleum Refinery and other downstream operators may review pump prices in response to global market movements.

US–Iran Talks Show Signs of Progress

US President Donald Trump recently stated that the Strait of Hormuz would be reopened as part of a proposed agreement involving the United States, Iran, and several Middle Eastern countries.

He said discussions with global partners were ongoing and described the talks as “orderly and constructive”.

Trump also noted that final details of the agreement were still being negotiated, but progress had been made toward a possible resolution.

Iran Confirms Negotiation Progress

Iranian authorities confirmed that discussions with the United States are advancing, although they stressed that a final agreement is not imminent.

According to Iran’s Foreign Ministry spokesperson, Esmail Baqai, both sides have reached understanding on several issues, but formal signing of an agreement remains uncertain.

Strategic Importance of the Strait of Hormuz

The Strait of Hormuz, through which nearly 20 per cent of global oil supply passes, remains central to global energy stability.

Any reopening of the waterway under a peace deal is expected to ease supply concerns and further push oil prices downward.

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Residents living in gated housing estates across Lagos are grappling with steep increases in electricity bills as estate operators struggle with rising diesel prices and worsening power supply from Nigeria’s national grid.

Across several estates, electricity tariffs have more than doubled within months, leaving many residents frustrated over mounting living costs despite paying premium housing fees for stable utilities and improved infrastructure.

Management notices issued within different estate communities revealed that some operators increased electricity tariffs from about N360 per kilowatt-hour to over N480/kWh within a short period, while others reportedly raised rates as high as N755/kWh.

One estate management attributed the latest tariff adjustment to the rising cost of diesel, which it said had climbed from below N1,000 per litre to over N2,000 per litre.

The development has triggered widespread complaints among residents who say the financial burden is becoming unsustainable.

“My estate just increased the tariff to N755/kWh. This is insanity,” one resident wrote in a social media post that gained attention online.

Another resident questioned the high cost of electricity within a private estate despite steady supply.

“Why is it N50,000 a day for 24 hours of light?” the resident asked on X, formerly Twitter.

The rising tariffs are linked to growing dependence on diesel-powered central electricity systems within estates, following persistent failures of the national grid.

Most gated estates in Lagos operate shared generator systems that combine electricity from public distribution companies with diesel-powered backup generation.

Under the arrangement, public electricity supply helps reduce overall energy costs while diesel generators serve as supplementary sources during outages.

However, estate operators say the situation has worsened as grid supply has dropped significantly in recent months.

According to notices circulated among residents, some estates now receive less than 40 per cent of their required electricity supply from the public grid, forcing operators to rely heavily on diesel generators for daily power distribution.

With diesel prices currently hovering around N1,900 to N2,000 per litre, operators say sustaining electricity generation has become increasingly expensive.

The impact is particularly severe for middle-class households that moved into private estates to escape unreliable public electricity supply.

For many families, monthly electricity bills now rival rent or school fees.

A household consuming about 300 kilowatt-hours monthly could now spend between N150,000 and N226,500 on electricity alone, depending on the estate tariff structure.

Some estate operators have also introduced minimum monthly electricity purchases, requiring residents to buy tokens worth at least N50,000 regardless of actual usage.

Operators argue that the policy is necessary to maintain steady cash flow for diesel procurement and maintenance of central power systems.

Residents, however, describe the requirement as an additional financial burden amid rising inflation and increasing living costs.

Estate management firms maintain that the tariff hikes are driven purely by operational realities rather than profit motives.

Several management notices reviewed indicated that tariffs could be reduced if diesel prices decline or public grid supply improves.

One notice stated that any improvement in market conditions would lead to a downward review of electricity charges for residents.

The crisis highlights the broader challenges facing Nigeria’s power sector, where decades of underinvestment in generation, transmission, and distribution infrastructure continue to undermine reliable electricity supply.

Distribution companies operating within Lagos have also struggled with financial and operational limitations, further reducing stable power delivery to residential communities.

Private estate operators initially relied on diesel-powered electricity systems as a temporary solution to supplement public supply.

However, rising fuel costs and persistent grid instability have transformed what was once a manageable alternative into a major economic challenge for both operators and residents.

Analysts say unless national grid performance improves significantly or diesel prices reduce, electricity costs within private estates are likely to remain unstable, placing additional pressure on urban households already struggling with rising inflation and utility expenses.

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The United Arab Emirates has announced its decision to withdraw from the OPEC and the broader OPEC+ alliance, with the exit scheduled to take effect on May 1, 2026.

The decision was confirmed by Emirati authorities on Tuesday, marking a major shift in global oil politics.

Strategic Energy Decision

Officials said the move aligns with the UAE’s long-term economic and energy strategy, aimed at expanding production capacity and responding more flexibly to global market conditions.

According to a statement from the country’s state news agency, the decision reflects efforts to accelerate investment in energy production and adapt to evolving geopolitical realities in the global oil market.

Concerns Over Production Limits

The UAE has long expressed concerns about OPEC production quotas, arguing that restrictions limit its ability to fully maximise its expanding oil production capacity.

With an estimated output capacity of nearly five million barrels per day, the country is one of the most influential producers within the bloc.

Market Outlook and Policy Direction

Officials said global energy demand is expected to continue growing steadily in the medium to long term, and the UAE plans to gradually increase output in line with market stability.

UAE Energy Minister Suhail Al Mazrouei described the decision as a “policy-driven evolution aligned with long-term market fundamentals.”

OPEC Membership History

The UAE joined OPEC in 1967 and has remained a key member for decades, playing an influential role in global oil supply coordination.

However, tensions over production quotas have intensified in recent years as the country pushed for higher output baselines linked to its investment in expanded capacity.

Oil Market Context

The announcement comes at a time of heightened instability in global energy markets, driven by geopolitical tensions in the Middle East and disruptions around the Strait of Hormuz, a critical passage for global crude exports.

At a recent OPEC+ meeting in April 2026, member countries agreed to a modest production adjustment as part of efforts to gradually unwind earlier output cuts.

Global Reaction Pending

As of the time of this report, neither the OPEC Secretariat nor other member nations have issued an official response to the UAE’s decision.

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Manufacturers across Africa have raised concerns over escalating energy costs, warning that continued pressure on production expenses could weaken industrial output and trigger widespread economic consequences.

The Secretary of the Pan-African Manufacturers Association, Segun Ajayi-Kadir, said the situation is becoming increasingly critical as most industries depend heavily on petroleum products for electricity generation, logistics, and packaging materials.

He noted that the surge in energy prices has significantly increased production costs, leading to higher prices of industrial goods and weakening consumer demand.

According to him, if the trend continues, consumers may eventually reach a limit where they can no longer afford goods, leaving manufacturers with unsold inventory and exposing some industries to collapse.

Ajayi-Kadir explained that disruptions in global shipping routes have further worsened the situation by increasing import costs and delaying the delivery of raw materials, machinery, and intermediate goods needed for production.

He also highlighted the link between rising global oil prices and currency depreciation, noting that higher crude oil prices increase demand for the U.S. dollar, weakening African currencies and further raising import costs.

He warned that the ongoing instability could also affect the agricultural value chain, particularly through disruptions in fertilizer supply, which would increase food production costs and strain agro-processing industries.

“Sustained constraints in fertilizer availability are likely to increase agricultural production costs and reduce the supply of raw materials for food processing industries across the continent,” he said.

Ajayi-Kadir called on African governments to prioritise industrial resilience by developing domestic refineries and strategic oil reserves to reduce exposure to external shocks.

He stressed the need for stronger backward integration, regional manufacturing networks, and improved local value chains to reduce dependence on imported inputs.

He also urged governments and private sector stakeholders to invest more in renewable energy, gas infrastructure, and regional power integration to ensure stable and affordable energy for industries.

In addition, he recommended expanding local production of fertilizers, petrochemicals, steel, and industrial chemicals to reduce vulnerability to global supply disruptions.

Ajayi-Kadir further emphasised the importance of improving transport infrastructure, including ports and logistics systems, to reduce trade costs and enhance competitiveness.

He concluded by urging stronger patronage of locally made products, saying this would help stabilise industrial production amid global economic pressures.

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Nigeria exported a total of 55.39 million barrels of crude oil in the first two months of 2026, even as the Dangote Petroleum Refinery grappled with a persistent shortage of domestic crude supply.

Data from the Central Bank of Nigeria showed that crude exports stood at 31.31 million barrels in January and 24.08 million barrels in February, leaving approximately 26.55 million barrels available for local refining.

Despite being Africa’s largest oil producer, Nigeria has struggled to meet the feedstock demands of its biggest refinery. The 650,000 barrels-per-day Dangote facility has repeatedly raised concerns over inadequate crude allocation, forcing it to rely on imports to sustain operations.

Between October 2025 and mid-March 2026, the refinery recorded a supply shortfall of about 79.53 million barrels. It received only 29.21 million barrels out of the estimated 108.74 million barrels required during the period, translating to a supply performance of just 26.9 percent.

Breakdown of deliveries shows the refinery received 4.55 million barrels in October, 6.45 million in November, 4.30 million in December, 5.65 million in January, and 4.66 million in February. In March, only 3.6 million barrels were supplied within the first half of the month.

The refinery has attributed the shortfall to local oil producers’ failure to meet supply obligations under the Petroleum Industry Act, raising concerns over compliance within the upstream sector.

Meanwhile, the Nigerian National Petroleum Company Limited confirmed it has been sourcing crude from third-party suppliers at international market prices to support refinery operations.

The supply gap has had ripple effects on fuel pricing. Petrol prices surged above ₦1,300 per litre during the recent Iran–US tensions before easing to around ₦1,250, with the refinery linking the increase to the high cost of imported crude.

Industry stakeholders, including the Crude Oil Refiners Association of Nigeria, have called for improved crude supply to domestic refineries, stressing that consistent feedstock is critical for profitability, price stability, and national energy security.

The development highlights ongoing challenges in Nigeria’s oil sector, where export priorities continue to compete with domestic refining needs.

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Nigeria may experience a temporary boost in liquefied natural gas earnings following a disruption in global supply triggered by security attacks on energy facilities in Qatar.

The development came after QatarEnergy, the world’s largest producer of liquefied natural gas, announced the suspension of production at major facilities after drone strikes targeted critical infrastructure in the Gulf nation.

The halt has unsettled global energy markets and pushed benchmark gas prices sharply higher across Europe and Asia, creating potential export opportunities for other LNG-producing countries including Nigeria.

Global Gas Prices Surge

Shortly after the production disruption was announced, major gas benchmarks recorded significant price increases across global markets.

European benchmark gas prices climbed sharply, with the Dutch Title Transfer Facility (TTF) contract rising by more than 25 percent to 39.40 euros per megawatt hour.

Asian LNG prices also surged as traders reacted to fears of tighter supply conditions. The widely tracked S&P Global Japan-Korea Marker rose to about $15.068 per million British thermal units, reflecting a strong demand response from Asian buyers.

Energy analysts say the sudden spike was driven by concerns that prolonged supply disruptions in Qatar could tighten global LNG availability, especially during periods of high demand.

Drone Attacks Trigger Energy Disruption

Authorities in Qatar confirmed that two drones struck strategic infrastructure near key industrial zones.

According to the country’s defence ministry, one drone hit a water storage facility linked to a power plant in Mesaieed Industrial City, while another targeted an energy installation in Ras Laffan Industrial City, a major hub for LNG processing and exports.

The attacks reportedly caused damage to infrastructure but did not result in casualties.

In response to the security incident, QatarEnergy announced a precautionary halt to LNG production and related operations while safety assessments and security reviews were conducted.

Short-Term Opportunities for Nigeria

Industry experts say the disruption could create short-term advantages for Nigeria in the global LNG market.

Nigeria is one of the world’s major exporters of liquefied natural gas through the operations of Nigeria LNG Limited, which supplies gas to several international markets.

According to energy market observers, the immediate benefit for Nigeria would come through higher global prices for LNG cargoes.

Former president of the Nigerian Liquefied Petroleum Gas Association, Dayo Adeshina, said Nigeria could secure premium pricing opportunities, particularly in Western markets.

He noted that Europe and the United States may turn to alternative suppliers as buyers search for replacement cargoes following the disruption in Qatar.

Analysts also pointed out that some spot cargoes could allow Nigerian exporters to take advantage of the current price rally.

Shipping Risks May Limit Asian Access

Despite the potential gains, energy analysts warn that Nigeria may struggle to capture significant market share in Asia due to heightened geopolitical risks affecting major shipping routes.

Key maritime corridors such as the Strait of Hormuz and the Suez Canal–Bab el-Mandeb passage have experienced growing security concerns, making some LNG shipments more complicated.

These logistical challenges could limit Nigeria’s ability to divert supplies to Asian buyers, who are among the largest consumers of LNG globally.

Contractual Obligations Remain Key

Another factor likely to limit Nigeria’s immediate gains is the structure of its LNG export agreements.

Most cargoes shipped by Nigeria LNG Limited are tied to long-term contracts with international buyers.

These agreements often restrict exporters from diverting cargoes to new markets during price spikes unless specific flexibility clauses are included in the contract.

Energy analysts say breaking existing contracts to pursue short-term profits could undermine Nigeria’s reputation in the global energy market.

Price Adjustment Clauses Offer Potential Gains

However, industry stakeholders believe Nigeria could still benefit from price adjustment mechanisms embedded in many long-term supply contracts.

Chairman of the Nigeria Council of the Society of Petroleum Engineers, Francis Nwaochei, explained that several LNG agreements contain provisions that allow price revisions when global gas benchmarks rise significantly.

Through these clauses, Nigerian exporters may receive higher revenues without breaching existing supply commitments.

Energy economists say this could provide the country with modest revenue gains while maintaining stability in contractual relationships with international buyers.

Balancing Short-Term Revenue and Market Stability

While the disruption in Qatar presents a temporary opportunity, experts caution that Nigeria must carefully balance short-term financial gains with long-term market credibility.

Maintaining reliability as a supplier remains critical for attracting future investments in the country’s gas sector.

Analysts also stress that Nigeria’s broader LNG potential will depend on expanding production capacity, improving infrastructure and resolving operational challenges that have historically limited output growth.

For now, the global LNG market remains on edge as traders monitor developments in the Middle East and assess how long the disruption at Qatar’s facilities could last.

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Nigeria’s electricity industry is facing deepening financial strain as Electricity Generation Companies (GenCos) reveal that total sector debt has climbed to N6.5 trillion, with projections indicating it could rise to N8.8 trillion before the end of 2026.

In a memo addressed to the Federal Ministry of Power, the GenCos warned that persistent liquidity shortfalls are threatening the stability of the entire power value chain and called for urgent structural reforms.

N2.4trn Debt Accumulated in 2025

The power producers disclosed that N2.4 trillion of the total debt was accumulated in 2025 alone, largely due to a recurring N200 billion monthly shortfall.

According to the memo, out of about N280 billion in monthly invoices, only 35 percent is paid, leaving a widening funding gap.

They cautioned that if the trend continues, total debt could escalate to N8.8 trillion by December 2026.

Generation Capacity vs Supply Reality

GenCos also highlighted structural inefficiencies in the sector. Although installed generation capacity has risen to 15,500 megawatts, only about 5,000 megawatts are transmitted to end users.

The companies stressed that despite liquidity challenges, fuel constraints, and infrastructure bottlenecks, they continue operations daily to sustain power generation nationwide.

Call for Presidential-Led Reform

To avert systemic collapse, the GenCos recommended:

• A presidential-led power sector reform initiative

• A long-term debt resolution framework

• Strengthened coordination across the electricity value chain

• Policies aimed at restoring investor confidence

Expert Calls for Governance Discipline

Reacting to the development, energy economist Prof. Wumi Iledare emphasized the need for governance discipline, particularly as states increase participation in electricity generation and distribution.

He noted that the Nigerian Bulk Electricity Trading Plc (NBET) remains central to market stability, serving as a creditworthy intermediary that supports investor confidence in a fragile electricity market.

However, he warned that sustainable reform requires alignment across gas supply, transmission, and distribution, adding that partial or strategic vertical integration may enhance efficiency and reduce market fragmentation.

FG’s N501bn Intervention

The Federal Government recently issued a N501 billion power sector bond under the Presidential Power Sector Debt Reduction Programme to address long-standing arrears owed to generation companies.

The bond, which achieved full subscription, attracted participation from pension funds, banks, and institutional investors. The initiative is expected to ease liquidity constraints that have weakened the sector for more than a decade.

Despite this intervention, GenCos maintain that deeper structural reforms are required to prevent further deterioration of Nigeria’s electricity industry.

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