On Saturday, February 28, the world woke up to a night that changed more than a map. A U.S.–Israel strike on Iran killed the country’s supreme leader, and Iran retaliated across the region, hitting not just Israel but multiple Gulf states hosting significant U.S. assets.
In hours, airports shut, ships hesitated, and markets moved. If you thought this was a “foreign” war, check the price of energy, the cost of flying, and the confidence of investors. Nigeria is already in the blast radius economically.
Start with the most obvious channel: oil. By Sunday, Brent crude was already being quoted around $80 in over‑the‑counter trade, roughly a 10 percent spike on the weekend because traders were pricing the nightmare scenario: disruption at the Strait of Hormuz.
Analysts have warned the market could open close to $100 if the outage looks prolonged. The reason is not hard to see. Hormuz is a narrow choke point; about one‑fifth of global oil consumption passes through it, along with critical LNG volumes out of the Gulf. When the route is threatened, the world reprices energy the way it reprices fear: quickly and expensively.
But the bigger story is how modern supply chains break without a single pipeline being destroyed. Even without confirmed widespread damage to oil infrastructure, producers, traders, and insurers can still freeze the system.
A report revealed that at least 150 tankers crude and LNG dropped anchor beyond the strait, with shipping risk warnings about congestion and insurance volatility. Another report cited LNG carriers slowing or turning back. Once ships pause, “available supply” shrinks in real time. That is how you get shortages even when the wellheads still work.
Now add aviation: the sector where panic is measurable in departure boards. Countries across the Middle East closed airspace; major hubs, Dubai, Abu Dhabi, Doha shut or severely restricted operations, and thousands of flights were canceled. Iran extended its airspace closure by NOTAM to March 3, while European regulators issued sweeping risk guidance covering multiple regional flight information regions.
Airlines reroute around conflict zones; that means longer journeys, higher fuel burn, crew scheduling chaos, and higher ticket prices. Even Air India canceled long‑haul services to Europe and North America because the network effects are global. Nigeria’s business travelers, students, pilgrims, and diaspora routes run through these hubs. When hubs fail, mobility becomes a luxury.
Then there is tourism. Gulf cities are not only oil capitals; they are world-class service economies. Dubai reported 19.59 million overnight tourists in 2025, and its airport handled 95.2 million passengers. Qatar reported 5.1 million visitors in 2025 with strong occupancy.
These numbers matter for Nigeria because the Gulf is both a destination and a transit platform. When that platform is damaged or simply perceived as unsafe, global travel demand shifts. Conferences postpone; leisure travelers cancel; airlines cut capacity. The shock is not just “fewer flights,” it is fewer deals, fewer visits, fewer partnerships, and weaker confidence in cross‑border commerce.
What about investments? Markets hate uncertainty, and this episode produced uncertainty at the highest level: war around bases and chokepoints. Gulf equities fell fast; Kuwait even suspended trading due to “exceptional circumstances.”
Globally, investors talked openly about safe‑haven moves into gold and defensive positioning. The IMF’s own research on geopolitical risk is clear: big geopolitical shocks can reallocate capital flows and amplify fragility when funds face rapid outflows. For emerging and frontier markets, it often means wider spreads, weaker risk appetite, and delayed investment decisions especially when higher oil prices threaten to keep inflation sticky and central banks cautious.
Nigeria meets this moment with a paradox. Higher oil prices can help our external accounts, but only if we can produce and convert those barrels into fiscal space and FX liquidity. Nigeria’s 2026 budget assumed $64.85 oil and 1.84 million barrels per day. Yet recent reported production has been closer to 1.58 million bpd in late 2025. So yes, a higher price is helpful but it is not a magic wand if volume and cash‑flow plumbing underperform.
And here is the uncomfortable truth: higher global energy prices can still hurt Nigerians at the pump. Nigeria still spends heavily on fuel imports, and shipping insurance and route disruptions raise landed costs. Jet fuel rises hit local airlines, which already operate under thin margins and FX constraints. So the benefit may accrue “upstream” while the pain shows up “downstream” as higher transport costs, higher food prices, and higher inflation.
Are we staring at World War III? Not automatically. “World war” is not defined by how frightening the headlines are; it is defined by whether major powers become locked in direct, sustained combat across multiple theaters.
Today’s evidence is a severe regional war with global economic spillovers: oil repricing, shipping paralysis, and aviation shutdowns, dangerous, costly, and destabilizing. But a world war becomes more plausible if miscalculation pulls great powers into direct confrontation or if chokepoints become battlefields that force wider alliance commitments.
The right question for Nigeria is practical: not “will the world end,” but “are we resilient enough if the world gets more expensive and more uncertain for 6–18 months?”
Olugbenga Olaoye is a seasoned professional with extensive experience in the oil and gas industry. He has a PhD in Economics from Covenant University, specializing in Energy Economics and holds a master’s degree in public service from the Clinton School of Public Service, USA and an Executive MBA from the Lagos Business School. He is also a member of USAEE. He writes from Fortworth, Texas. USA.
