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Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), has detailed how the Iran-US-Israeli conflict affects the Nigerian economy.

In a statement made on Sunday in Lagos, Yusuf observed that the effects would be mixed—some beneficial and some detrimental—depending on how long the conflict lasts and how effective domestic policy responses are.

He pointed out that the intensifying conflict involving Iran, the United States, and Israel had introduced a new wave of geopolitical risk into the global economy.

He claims that energy markets are the primary transmission channel, highlighting the strategic significance of the Strait of Hormuz, which daily carries approximately 20 percent of the world’s crude oil supply.

He stated that any disturbance to this corridor would instantly affect global oil prices, shipping expenses, insurance rates, and supply chains.

“There is also the output disruption effect, as Middle East countries are major oil producers.

“For Nigeria, an oil-dependent economy where crude accounts for over 85 per cent of export earnings and about half of government revenue, the implications are significant,” Yusuf said.

The head of CPPE pointed out that geopolitical tensions in the Middle East have historically caused sharp rises in crude oil prices because of fears of supply disruptions.

He added that speculative risks in the Strait of Hormuz usually caused price fluctuations of $5–$15 per barrel over short durations.

According to Yusuf, for Nigeria, every rise in crude oil prices leads to increased export earnings and government revenues.

He stated that the immediate advantages comprise augmented crude export revenues, enhanced foreign exchange inflows, bolstering of external reserves, and increased FAAC allocations across all levels of government.

“However, revenue gains are critically dependent on production levels.

“Nigeria’s current crude output has fluctuated around 1.4 million barrel to 1.6 million barrels per day, below installed capacity and vulnerable to oil theft, pipeline vandalism, and underinvestment in upstream infrastructure.

“Without a sustained improvement in production efficiency and security, Nigeria may not fully optimise any price windfall,” he said.

Yusuf pointed out a medium-term risk: if the conflict escalates and dampens global growth, oil demand could weaken, resulting in price corrections.

He stated that the development could also alleviate short-term pressure on the naira and bolster investor confidence.

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