…Experts want FG to ramp up crude production
…Marketers express cautious optimism over W’Bank counsel
…CPPE counters W’Bank, says increased imports economically injurious
By Adewale Sanyaolu
Global fears of a deeper energy crisis are mounting as diplomatic efforts between the United States and Iran to put an end to the ongoing Middle East conflict remain stalled.
Following the deadlock, President Donald Trump on Sunday ordered a US naval blockade of the Strait of Hormuz in response to Iran’s “unyielding” refusal to give up its nuclear ambitions during peace talks in Islamabad.
While acknowledging that the marathon negotiations in Pakistan had gone “well” and “most points were agreed to,” Trump said Tehran had refused to concede on the issue of its nuclear program.
“Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz,” Trump said on his Truth Social platform.
“Any Iranian who fires at us, or at peaceful vessels, will be BLOWN TO HELL!”
In a telephone interview with Daily Sun, a disappointed publicity Secretary of the Crude Oil Refiners Association of Nigeria(CORAN), Mr. Iche Idoko, said the deadlock in talks between thr United States and Iran is a major setback for Nigeria and the global community.
He noted that a time the world expected a respite considering that oil prices are beginning to drop below the $100 mark, the stalement signals a further fragile economy for Nigeria.
Idoko warned that with talks breaking down, there could be further spikes in oil prices which is not the global community wants at this time.
The CORAN publicity Secretary said Nigerians are already walking the tight rope with rising petrol price, saying a further escalation of the Middle East crisis could translate to higher cost of petrol.
He, however, called on the Federal Government to immediately begin to consider measures to cushion the effect of higher oil prices on the economy.
He canvassed that Government should begin to consider a local pricing model for local refiners, adding that since cost of freight and insurance was not a factor for locally produced crude oil, Nigerians should begin to feel the impact at the pumps.
“Let Government stretch the naira-for-crude policy beyond Dangote refinery to other locally refiners so that the effect of higher crude oil prices could be minimized.In addition, let the volume of crude oil cargoes allocated to Dangote refinery be increased.
Also speaking, the National President of Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), Mr. Billy Gillis-Harry, has expressed concerns over the deadlock of talks between the two countries, saying Nigeria and the rest of the world should be ready to bear the brunt.
He said, the breakdown of talks would further impact petroleum product prices in the coming days as oil price may be on the upward swing again after some days of respite.
“As you could have noticed, as oil prices were dropping, our retail petrol price was equally dropping. But this latest deadlock will further strain Nigerians already battling with higher cost of petroleum products.
For now, we don’t know what the price of the next cargoes coming from the Middle East and elsewhere will be.
On the counsel by the World Bank for Nigeria to reopen imports of petroleum products, Gillis-Harry said that is welcome development but warned the Federal Government against making it a point of advantage by taking advice from global financial institutions on how to run our lives.
“Their inputs are important but I would want Nigerians and the Nigerian government not to take any of what these global financial institutions advise us in its entirety,’’.
Investors and oil giants are now predicting that the diplomatic deadlock may trigger deeper disruptions to oil supply routes and accentuate further volatility in already fragile markets.
At the same time, the Centre for the Promotion of Private Enterprise (CPPE) has warned against ballooning the importation of petroleum products and food as suggested by the World Bank, saying they could undermine local industries and worsen pressure on Nigeria’s foreign exchange position.
“This recommendation is deeply troubling and fundamentally misaligned with Nigeria’s current economic realities and reform trajectory. At a time when the country is making measurable progress in restoring macroeconomic stability, evidenced by improving foreign reserves, moderating inflation, a more stable exchange rate regime, and growing capacity for the export of refined petroleum products, the policy priority should be to consolidate these gains, not undermine them.
Nigeria is gradually transitioning towards greater self-sufficiency in petroleum products supply, driven by significant private investments in domestic refining capacity. This momentum should be strengthened through deliberate policies that support local production, enhance value addition, and deepen industrial linkages within the economy.
Encouraging increased importation of petroleum products at this stage risks reversing hard-won gains. It would exacerbate foreign exchange pressures, weaken domestic refining investments, and heighten the economy’s vulnerability to external shocks, particularly in a global environment characterized by geopolitical tensions and energy market volatility.
The emphasis, therefore, should be on expanding and stabilizing domestic production capacity, ensuring reliable crude supply to local refineries on competitive terms, and fostering an enabling environment for downstream sector investments. This is the pathway to sustainable energy security, economic resilience, and long-term industrial development, not a return to import dependence” the CPPE stated.
With no clear progress on key issues, investors are increasingly pricing in risk, while uncertainty continues to cast a shadow over prospects for near-term energy stability, especially as President Donald Trump signalled to hit Iran harder if a deal is not sealed after the two-week ceasefire agreement.
Nonetheless, Iran has reinforced its position over the Strait of Hormuz, with Deputy Parliament Speaker Haji Babaei quoted by Mehr News Agency as saying the waterway is “completely” under Iranian control and that transit fees must be paid in the national currency, the rial.
He was further quoted as stating that “250 members of parliament unanimously supported the strait of Hormuz plan, and according to the leadership formula, this strategic waterway is non-negotiable under any circumstances,” signalling Tehran’s refusal to accept external conditions on its use.
Babaei also pointed to Iran’s resilience under sanctions, saying, “Despite sanctions, Iran’s oil exports have exceeded 1.6 million barrels, and today our country’s oil has become practically non-sanctionable. The Iranian nation will not back down from its demands even an inch.”
The Strait of Hormuz, a critical chokepoint through which about one-fifth of global oil supply passes, remains central to rising geopolitical tensions. Its full opening to all vessels, regardless of political alignment, is reported to be a key demand by the United States for ending the ongoing conflict and forms part of a conditional two-week ceasefire arrangement agreed with Iran last week.
The partial restriction or uncertainty around passage through the strait has already unsettled global energy markets, pushing fuel prices higher and raising concerns about broader economic consequences, including political implications in the United States.
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