ABUJA: The Sea and Empowerment Research Centre (SEREC) has warned that inflation in Nigeria could rise by three to five percent amid ongoing tensions between the United States and Iran.
SEREC’s Head of Research, Eugene Nweke, disclosed this in a statement on Monday in Abuja, noting that the situation poses significant geopolitical and economic risks to global energy markets and maritime trade.
Nigeria’s headline inflation eased slightly to 15.10 percent in January, down from 15.15 percent in December 2025, according to the National Bureau of Statistics’ Consumer Price Index report.
Nweke highlighted concerns over the vulnerability of the Strait of Hormuz, a crucial waterway between Iran and Oman through which roughly one-fifth of global crude oil supply transits daily.
He noted that any prolonged disruption could trigger sustained oil price volatility, rising freight rates, surging war-risk insurance premiums, and global inflationary pressures.
“Iran’s Foreign Minister Seyed Araghchi has warned that U.S. and Israeli attacks on Iran, including any attempts on Supreme Leader Ali Khamenei, could have deep and widespread consequences,” Nweke said.
According to SEREC modelling, oil prices could range between $110 and $140 per barrel under sustained tensions.
Global freight rates may rise 15 to 40 percent due to rerouting and risk premiums, while marine war-risk insurance could surge 200 to 400 percent in high-risk corridors.
Emerging economies may face renewed inflation and currency depreciation risks.
He added that while Nigeria could see short-term fiscal gains from elevated crude prices, these could be offset by inflation driven by logistics and imported input costs. Exchange rate volatility could intensify, and food and transport prices may rise, underscoring the need for prudent fiscal management.
“At $120 per barrel, Nigeria could earn an additional $18 to $22 billion in oil revenue annually, with GDP growth potentially increasing by 1 to 1.2 percent in the short term,” Nweke said.
The SEREC official noted that Nigeria’s refining capacity could offer a competitive advantage if integrated with regional supply networks and supported by frameworks such as ECOWAS cooperation mechanisms.
He urged that oil windfall gains be channelled into stabilisation and infrastructure investment rather than recurrent expenditure, and that crude allocation to domestic refineries remain steady to maintain supply stability.
“SEREC advises strengthening maritime security coordination across the Gulf of Guinea, expanding strategic petroleum and refined product reserves, and deepening regional trade integration to reduce reliance on volatile extra-African shipping routes,” he said.
Nweke concluded that the U.S.–Iran confrontation represents not just a geopolitical conflict but a structural stress test for global trade and maritime systems.
He stressed that Nigeria’s resilience will depend not only on crude revenue gains but also on disciplined fiscal management, optimised domestic refining, trade diversification, and maritime competitiveness.
“The Dangote Refinery presents a strategic buffer, but its effectiveness will hinge on coherent national policy alignment,” he added.
