US-Iran conflict threatens Nigeria’s inflation outlook as oil prices approach $100
Global oil prices edged closer to the psychologically significant $100-per-barrel threshold on Thursday as renewed military confrontation between the United States and Iran intensified concerns over prolonged disruptions to global crude supplies, with economists warning that the rally could reignite inflationary pressures in Nigeria and other import-dependent economies.
Market data obtained on July 23 showed that Brent crude rose by 4.68 per cent to trade at $98.47 per barrel, while U.S. benchmark West Texas Intermediate (WTI) crude climbed $3.28 to $90.11 per barrel, reflecting growing anxiety over the security of key oil shipping routes in the Middle East.
The latest price rally followed the breakdown of the ceasefire between Washington and Tehran, with renewed hostilities heightening fears that crude exports from the Gulf region could face sustained disruptions.
Adding to market uncertainty is Iran’s continued closure of the Strait of Hormuz—through which roughly one-fifth of the world’s traded oil passes—as well as intensified attacks by Iran-backed Houthi fighters on commercial vessels in the Red Sea.
Industry analysts say the renewed security threats have prompted some shipping companies to reroute vessels away from the area, increasing freight costs, extending delivery times and raising concerns over tighter global oil supplies.
The combined disruption to both the Strait of Hormuz and the Bab el-Mandeb Strait has amplified fears that global energy markets could face sustained supply constraints if hostilities continue.
Earlier this week, the Central Bank of Nigeria (CBN) retained its Monetary Policy Rate (MPR) at 26.5 per cent, maintaining a tight monetary policy stance after the Monetary Policy Committee concluded its 306th meeting in Abuja.
CBN Governor Olayemi Cardoso said policymakers considered both domestic and global economic developments before deciding to keep interest rates unchanged.
