Most of West Africa’s refined petroleum products originate from the Middle East and transit through the Strait of Hormuz. With that passage effectively closed since early March, Nigeria and several neighboring countries are scrambling to source alternative supplies from refineries iNigeria is confronting a deepening energy emergency as the ongoing blockade of the Strait of Hormuz by Iranian forces drastically reduces the supply of refined petroleum products reaching West Africa. The crisis, which stems from the US-Iran military conflict n Europe, the United States, and India. Nigerian oil marketers have reported supply shortfalls at major distribution terminals, and fuel queues reminiscent of the worst periods before subsidy removal have begun reappearing in Lagos, Abuja, and Port Harcourt.
The Nigeria Midstream and Downstream Petroleum Regulatory Authority has urged calm, but the market is responding to the reality that global oil prices have surged above $107 per barrel and that Nigeria’s refinery capacity, though improving with the partial commissioning of the Dangote Refinery, remains insufficient to meet domestic demand. The Dangote Refinery, which was designed in part to reduce Nigeria’s dependence on imported refined petroleum, is operating below full capacity due to ongoing technical challenges and crude supply logistics.
The naira, which the Central Bank had stabilized through foreign reserve management and improved forex liquidity, is facing renewed pressure as dollar demand rises for petroleum imports. Nigeria’s foreign reserves of $45.4 billion provide a meaningful buffer, but sustained high oil import costs combined with global investor risk aversion linked to the Middle East conflict could erode that buffer faster than the CBN would like. Economists are watching the exchange rate carefully as a leading indicator of broader macroeconomic stress.
Nigeria is not alone in its predicament. A Wikipedia analysis of the economic impact of the 2026 Iran war specifically lists Nigeria alongside Pakistan, Bangladesh, Zimbabwe, and Vietnam as countries facing severe petroleum shortages. The Philippines declared a national emergency in late March due to combined fuel shortages and a transport workers strike, underscoring how the Hormuz blockade’s effects are spreading to every corner of the global economy.
The political calculus for Tinubu is delicate. Removing fuel subsidies was a painful but economically necessary decision. If the government is now seen as unable to ensure adequate fuel supply at any price, the backlash could undermine the administration’s credibility on economic management at exactly the wrong moment. Opposition politicians have already begun framing the fuel shortage as evidence that the administration’s economic reforms lack the structural depth needed to protect Nigerians from external shocks.
The federal government is reportedly in discussions with Nigeria’s NNPC Limited to accelerate crude swap arrangements with Indian and European refineries that would guarantee refined product supply without passing through the Strait of Hormuz. Meanwhile, the government is also in dialogue with East African partners to explore alternative supply chain logistics, though these remain medium to long-term solutions rather than immediate relief.
The broader lesson for Nigeria’s policymakers is one that energy security analysts have long argued. The country’s vulnerability to external petroleum supply shocks will persist until domestic refining capacity reaches full functionality and until investment in alternative energy sources reduces the economy’s near-total dependence on liquid fuels. That transition is underway but far from complete, and the current crisis is exposing how much still needs to be done.
