Nigeria’s financial markets may face a volatile week as rising oil prices and escalating geopolitical tensions reshape the global economic outlook, Senior Market Analyst for Africa at FXTM, Matthew Anthony, has said.

Oil prices surged in the past week, as tensions intensified in the Middle East amid the widening Israel-U.S.–Iran conflict.

The spike followed attacks on key energy installations and the effective closure of the Strait of Hormuz, a critical shipping route responsible for about 20 per cent of global oil supply.

According to Anthony, higher crude prices could present a mixed outcome for oil-producing countries such as Nigeria.

“Major oil-producing nations like Nigeria may benefit from the current geopolitical tensions if they can contain inflation and channel the additional revenue into key budget priorities while preparing for potential market shocks,” he said.

The geopolitical escalation has already triggered a wave of risk aversion across global financial markets. Asian equities plunged at the start of the week, European stocks opened sharply lower and U.S. equity futures signalled a negative opening as investors moved to safer assets.

In the commodities market, oil has recorded one of its sharpest rallies in recent years. Brent crude has climbed roughly 30 per cent this month alone.

The last time crude benchmarks crossed the $100 threshold was during the Russian-Ukrainian War, when supply disruptions and geopolitical risks triggered a global inflation surge.

Currency markets are also reacting to the turbulence. Safe-haven demand has supported the U.S. dollar and the Swiss franc, while the Canadian dollar has emerged as the best-performing G10 currency this month, benefiting from its strong correlation with oil prices.
Gold, however, ended last week lower despite the broader risk-off sentiment.

The decline followed weaker-than-expected U.S. labour data, which showed non-farm payrolls seeing the largest monthly drop since October 2025, while the unemployment rate rose to 4.4 per cent.

Still, Anthony noted that gold remained trapped within a tight trading range as investors weighed a stronger dollar against mounting inflation risks driven by rising energy costs.

The inflation outlook will remain central to market direction this week. Traders are currently pricing roughly a 50 per cent probability that the Federal Reserve could cut interest rates twice in 2026.

But upcoming inflation indicators, including the Consumer Price Index (CPI) and the Personal Consumption Expenditures (PCE) index, could reshape the expectations.

“Surging energy prices are fuelling inflation fears and forcing markets to reassess the path for interest rates,” Anthony said, adding that stronger-than-expected inflation data could further support the dollar and increase pressure on precious metals.

For Nigeria, the focus this week will also include domestic inflation data, which may determine whether the country can fully capitalise on the current oil price rally and avoid fresh price pressure at the same time.