The Director-General of the Franco-Nigeria Chamber of Commerce and Industry (FNCCI), Moses Umoru, has warned that Nigeria may not fully benefit from rising global oil prices triggered by escalating tensions involving Israel, Iran and the United States, citing existing crude-backed obligations that limit the country’s fiscal flexibility.

Umoru, in a statement on the economic implications of the geopolitical crisis, noted that global conflicts often extend beyond their immediate regions, reshaping markets, political alliances and national economies.

According to him, while the ongoing tensions have pushed crude oil prices close to $100 per barrel—well above Nigeria’s 2026 budget benchmark of $64 – the apparent windfall comes with significant constraints.

He explained that the Nigerian economy faces a “dual effect” from the crisis. On one hand, higher oil prices should ordinarily translate into increased export earnings, improved foreign exchange inflows and expanded fiscal space.

On the other hand, he said, the surge in crude prices has intensified inflationary pressures domestically, with petrol prices rising sharply from about N750 to as high as N1,400 per litre in some parts of the country.

However, Umoru stressed that the benefits of higher oil prices are not as straightforward as they appear. He pointed out that Nigeria’s reliance on forward oil sales and crude-backed loans significantly reduces the volume of crude available for sale at prevailing market rates.

Providing further insight, he highlighted key agreements such as the $3.3 billion “Project Gazelle,” which commits Nigeria to supplying 90,000 barrels per day until at least 2028, and the “Project Leopard” deal, which ties an additional 35,000 barrels per day over five years beginning in 2025. These commitments, he said, are structured around lower historical oil price benchmarks, meaning current high prices do not directly translate into increased revenues for the country.

“What this implies is that instead of earning from today’s favourable prices, a significant portion of Nigeria’s crude output is already earmarked for debt servicing — both principal and interest — based on earlier pricing assumptions,” he said.

Umoru contrasted Nigeria’s position with that of other major oil-producing nations, such as Saudi Arabia, which are better positioned to accumulate excess revenues in sovereign wealth funds during periods of high oil prices. In Nigeria’s case, he noted, much of the production is effectively “pre-sold,” leaving limited room to build fiscal buffers or cushion the impact of rising domestic costs.

He warned that without strategic adjustments, the country risks missing out on the full benefits of the oil price surge while simultaneously bearing the brunt of inflationary pressures driven by global instability.