Experts say oil prices could go above $90 per barrel after the United States bombed some nuclear facilities in Iran.
The U.S. launched airstrikes on three of Iran’s nuclear sites, and President Trump called the attack a “great military success.”
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This action has made the situation in the Middle East more tense.
Iran is one of the world’s top oil producers and a founding member of the oil group OPEC.
Because of the growing conflict between Israel and Iran, oil prices have already risen from about $68 to $79 per barrel in recent weeks.
Speaking with Vanguard, Dr. Diran Fawibe, Chairman of International Energy Services, explained that when there is a threat to the global oil supply, prices usually go up.
This is because buyers worry about getting enough oil, which can lead to shortages and price increases.
He said that if Iran’s oil production is affected or if Iran blocks the Strait of Hormuz a key route for oil shipments prices will almost certainly rise further.
Prof. Wumi Iledare, a petroleum economics expert, added that the U.S. strikes could push oil prices higher in the short term. But unless oil supply is actually stopped, especially through the Strait of Hormuz, the price hike may not last long.
For Nigeria, he said, higher oil prices could bring in more money from exports. But it could also lead to higher inflation and financial carelessness if not managed well.
Nigeria might face more economic problems if it spends the extra money without making serious reforms.
Dr. Muda Yusuf, head of the Centre for the Promotion of Private Enterprise, said the war between Israel and Iran is worsening the global economy, which is already suffering from the Russia-Ukraine war and the Israel-Hamas conflict.
He also pointed to trade disruptions caused by the Trump administration.
He noted that oil is Nigeria’s biggest source of foreign income.
If the country increases oil production, the higher prices will bring in more money, grow foreign reserves, and help stabilize the value of the naira.
Currently, oil makes up about half of Nigeria’s government revenue. So higher oil prices could help the government reduce its debt and manage spending better.