Profits reaped by developing world oil and gas producers, including Nigeria, from the recent surge in global energy prices are likely to be ephemeral, the head of the United Nations trade agency declared on Tuesday. This stern warning arrives amidst escalating concerns over the economic fallout from heightened geopolitical tensions, particularly those impacting crucial maritime routes like the Strait of Hormuz, which have led to a significant uptick in shipping costs.

The International Trade Centre's Cautious Outlook

Pamela Coke-Hamilton, Executive Director of the International Trade Centre (ITC), shared her perspective with Reuters, noting that while price hikes present a challenge, global oil and gas supplies could be diversified, suggesting the situation might not be “as dire” as initially feared. However, the ITC underscored the temporary nature of these windfalls.

• Countries poised to benefit from increased oil revenues include:
• Nigeria
• Kazakhstan
• Brazil
• Angola
• Libya
• However, these gains are expected to be limited, as nearly all these nations, with the exception of Kazakhstan, remain net importers of refined petroleum products, effectively offsetting much of the revenue increase.
• Nations likely to see a boost from higher natural gas prices include:
• Algeria
• Malaysia
• Turkmenistan
• Azerbaijan
• Nevertheless, the ITC cautioned that the expansion of natural gas supply from these countries is projected to be restricted in the immediate term.

Geopolitical Instability and Market Volatility

The current surge in oil prices is directly linked to a period of intense geopolitical instability. Prices saw a dramatic jump on Monday following the breakdown of US-Iran peace talks and an announcement by then-President Donald Trump regarding a potential blockade of the strategically vital Strait of Hormuz, intensifying fears over Middle Eastern energy supplies.

Oil prices, which had tumbled the previous week after a ceasefire agreement between the United States and Iran, initially soared around eight percent on Monday, pushing both Brent and West Texas Intermediate (WTI) crude contracts above $100 a barrel. However, this rally proved short-lived, with prices sliding downward. By Tuesday, the sell-off extended, seeing WTI dive approximately eight percent and Brent more than four percent, reflecting significant market volatility.

IMF's Sobering Assessment for Nigeria

Nigeria, a prominent oil-producing nation, is currently experiencing the upside of elevated international oil and gas prices driven by global events. The Federal Government had optimistically projected a crude oil price benchmark of $64.85 per barrel in its 2026 budget, reflecting expectations of sustained higher prices.

However, the International Monetary Fund (IMF) on Tuesday delivered a sobering revision, downgrading Nigeria’s 2026 growth forecast to 4.1 percent. The IMF also issued a critical warning: any gains from higher oil and gas prices would likely be nullified by the escalating shipping costs directly attributable to the ongoing geopolitical instability.

This revision was a key announcement during the joint IMF and World Bank Spring Meetings in Washington, D.C., where global economic officials highlighted that war-related energy and supply chain disruptions are significantly undermining recovery efforts across various regions.

• Broader Pressures: IMF Chief Economist Pierre-Olivier Gourinchas elaborated that the downgrade reflects widespread pressures confronting energy-importing countries. “On Sub-Saharan Africa, we are seeing some downgrade of growth, and we are seeing some uptick in inflation in a number of countries in the region,” Gourinchas stated. He added that “the impact is very much along the lines of what we see more broadly — for a lot of the countries, especially the ones that are energy importers.” The Fund is actively monitoring countries' needs in the current climate and coordinating with the International Energy Agency and the World Bank on energy market disruptions.
• Competing Pressures on Nigeria: Denz Igan, Chief of the IMF Research Department’s World Economic Studies Division, further elucidated the 0.3 percentage point cut in Nigeria’s forecast. “War-related higher fuel and fertilizer prices and higher shipping costs are going to weigh on non-oil activity in Nigeria,” Igan explained. He concluded that while “there’s some offset coming from higher oil prices, but the net balance is weaker growth in 2026, with some recovery built in for 2027.”