Happy hump day! You’ve made it to halfway through the work week, so you’ve pretty much made it to the weekend.

After US and Israeli strikes on Iran, and Iran’s retaliation, traders got nervous about oil supply. The biggest concern is the Strait of Hormuz, a narrow waterway between the Persian Gulf and the open ocean. About 1 in every 5 barrels of oil in the world passes through it. If ships can’t move safely through that route, less oil reaches the global market. That fear alone was enough to push Brent crude up by about 8.5% as of the 3rd of January.

Saudi Arabia’s state oil company, Saudi Aramco, also paused operations at a major refinery after a drone incident. That added to supply worries and markets react quickly to risk.

Nigeria’s double-edged outcome

Higher oil revenue: Nigeria produces about 1.45 million barrels per day. If predictions are correct and prices climb toward $100 per barrel, export earnings and government revenues would rise significantly. Estimates suggest the country could earn roughly $1.3 billion extra in a single month at those levels. That would support foreign reserves and fiscal inflows at least in the short term.

Higher petrol prices: But Nigeria no longer operates a fuel subsidy regime. Pump prices now reflect global market conditions. Petrol currently sells between ₦824 and ₦880 per litre. If crude rises toward $100–$120, analysts warn prices could cross ₦1,000 per litre.

Even with the Dangote Petroleum Refinery operating, much of its crude feedstock is linked to international pricing. A portion of refined products is still imported. That means global volatility passes through quickly to domestic fuel costs. Higher diesel prices would also raise transport, logistics and food costs, adding pressure to inflation.

Analysts say “breathe” (paraphrasing)

Some analysts caution against comparisons to historic oil crises. Today’s market is more diversified, with more supply flexibility outside the Gulf. But markets respond sharply to uncertainty. If shipping disruptions continue or Gulf infrastructure is further targeted, elevated prices could persist.

📈 Market ups: Dangote Cement Plc more than doubled 2025 net profit to ₦1 trillion ($730m) as revenue rose 20% to ₦4.3 trillion, with stronger pricing, lower finance costs and zero FX losses offsetting slightly weaker sales volumes; the company is expanding capacity across Africa, increasing clinker exports and shifting to CNG trucks to cut fuel costs, while proposing a 50% dividend hike to ₦45 per share. Meanwhile, Nigerian Exchange Group Plc reported 36% revenue growth to ₦22.9bn, a 44% jump in operating profit and a 67% drop in finance costs after deleveraging, declaring a 50% higher dividend of ₦3.00 per share alongside a 1-for-3 bonus share issue. It is a sign that both industrial and capital market leaders are seeing stronger margins.

⛏️Nigeria’s crystals era: Nigeria has signed a $1.3bn deal with Africa Finance Corporation to build a 1-million-ton-per-year alumina refinery that will process bauxite (a sedimentary rock with a relatively high aluminium content) locally, following Nigeria’s 2025 bauxite boom. The project is part of the government’s push to move beyond exporting raw minerals and capture more value in the aluminium chain, with officials projecting up to $1.2bn in annual economic impact and more than $25bn over 20 years, supported by export earnings. The agreement also includes expanded geoscientific mapping to attract further mining investment, though execution risks remain high given the energy intensity of refining and Nigeria’s persistent power and infrastructure constraints.

🛎️CBN’s most anticipated auction: The Central Bank of Nigeria plans to borrow ₦1.05 trillion from investors on March 5 by selling short-term Treasury Bills. This is the bank’s first auction since cutting interest rates last week. The government is offering three options (3-month, 6-month and 1-year bills), with most of the money coming from the 1-year paper. Because rates were just reduced, this auction will show whether investors are willing to accept lower returns or demand higher yields, giving an early signal of where borrowing costs may head next.

Nigeria’s foreign exchange reserves have had a early-2000s style resurgence. From just $3.99 billion at the end of 2023, net reserves climbed to $34.8 billion by the end of 2025, a nearly 8x increase. Even more striking, this figure exceeds the country’s total gross reserves of $33.22 billion recorded two years earlier.

What should we thank?

CBN Governor Olayemi Cardoso credits the rebound to reforms aimed at improving transparency and credibility in the foreign exchange market. According to him, unifying currency windows, reducing distortions in pricing, and boosting investor confidence have all played a role. The result is a stronger buffer to stabilise the naira, meet international obligations, and absorb external shocks.

The gains have been steady: net reserves jumped 50% in 2025 alone, while gross reserves rose to $45.7 billion. By mid-February 2026, gross reserves hit $50.45 billion, signaling continued momentum. For a country where oil dominates foreign earnings, this is a major vote of confidence for the economy.

But the people are still left out

But while Nigeria’s reserves look healthy on paper, getting dollars in practice is another story. The gap between the official exchange rate (₦1,368/$1) and the parallel market (₦1,390/$1) has widened, reflecting both structural and speculative pressures. Analysts say part of the divergence stems from banks struggling to meet demand for legitimate transactions (e.g. from importers to parents paying school fees abroad) while speculation and political demand ahead of elections further fuel the black market.

Experts stress that the situation isn’t just about numbers. Dr. Muda Yusuf, a former DG of the Lagos Chamber of Commerce, notes that speculation and structural supply issues are key. Bureau de Change operator Umar Cindo adds that delays and uncertainty in policy implementation drive people to the parallel market, creating arbitrage opportunities that widen the gap even more.

So what does this all mean?

Nigeria’s reserves growth is a policy win, showing the CBN’s reforms are working, and investor confidence is improving. But until access and supply issues are resolved, businesses and consumers will continue facing challenges buying dollars at stable rates. In short, plenty of dollars in the vault, but not all Nigerians can reach them yet.