Oil prices surge after Israeli strike on Iran, PMS hike feared in Nigeria

Global oil prices soared sharply on Friday following Israel’s military strike on Iran, fuelling fears of a potential hike in the price of Premium Motor Spirit (PMS) in Nigeria.

The attack, which targeted an Iranian nuclear facility, marked a significant escalation in the ongoing hostilities between the two Middle Eastern nations, prompting immediate market reactions and concern over disruptions to oil supply.

In the wake of the Israeli Defence Forces (IDF) offensive, major crude oil benchmarks surged to their highest levels so far in 2025.

Brent crude rose by 9 percent to $75.15 per barrel, while NYMEX Light Sweet and West Texas Intermediate (WTI) climbed to $73.20 and $74 per barrel, respectively — all breaching or nearing the Nigerian government’s budget benchmark of $75 per barrel.

This marked the first time in the year that oil prices exceeded Nigeria’s 2025 fiscal projection, a development that offers mixed implications for the country.

READ ALSO: Israel Hits Iran Nuclear Sites

While higher oil prices could potentially boost government revenue, they also raise the spectre of increased domestic fuel costs, especially for PMS, which is still largely influenced by international crude prices.

Currently, PMS prices range between N870 and N910 per litre in major cities like Lagos and Abuja. Analysts warn that continued instability in the Middle East could drive these prices even higher, placing more financial strain on Nigerian consumers already grappling with inflation.

One key factor is the Dangote Refinery, Africa’s largest refining facility, which remains heavily dependent on imported crude — particularly from the United States — to scale up production of petroleum products. Any global supply disruption could affect its operational efficiency and, by extension, domestic fuel pricing.

In response to the attack, Iran launched a retaliatory strike on Israeli targets, further stoking fears of a broader regional war.

The escalation has triggered widespread international concern, with the United Nations, the United States, China, Saudi Arabia, and other global powers calling for restraint to avoid a full-scale conflict that could threaten global energy stability.

Market watchers and policymakers alike are now monitoring developments closely, as any further escalation could push oil prices even higher and exacerbate economic challenges for oil-importing countries, including Nigeria.