The Strait of Hormuz should not hold Nigeria hostage

Every time tensions rise in the Strait of Hormuz, Nigerians begin to worry about higher fuel prices, rising transport fares and another round of inflation. That should never be the case. A country that ranks among Africa’s leading crude oil producers should not have its economic stability determined by events unfolding thousands of kilometres away. The gradual resumption of shipping through the Strait of Hormuz following the fragile ceasefire between the United States and Iran is another reminder of how exposed Nigeria remains to disruptions beyond its control.

The Strait of Hormuz is one of the world’s most important energy corridors, carrying about one-fifth of globally traded crude oil and significant volumes of liquefied natural gas. Any disruption immediately affects shipping costs, insurance premiums and global energy prices. Nigeria cannot influence military tensions in the Gulf or the diplomatic negotiations that follow them. What it can influence is whether those developments continue to dictate the cost of living at home.

The real lesson from every Middle East crisis is not about geopolitics. It is about Nigeria’s unfinished energy transition. For decades, the country focused on extracting and exporting crude oil while neglecting the infrastructure needed to convert that resource into broad-based economic resilience. The result is a familiar contradiction. Nigeria earns foreign exchange from crude exports but has repeatedly depended on imported refined petroleum products to meet domestic demand. Whenever global supply chains come under pressure, the effects quickly filter through the economy in the form of higher transport costs, rising food prices and increased operating expenses for businesses.

Recent investments in domestic refining represent an important shift, but they should mark the beginning of a broader strategy rather than the conclusion of one. Energy security is no longer measured simply by the volume of crude oil a country produces. It is measured by its ability to provide reliable, affordable energy for households, industries and public services regardless of external shocks. That is the standard Nigeria should pursue.

The same principle applies to electricity. Businesses across the country continue to spend heavily on self-generated power because the national grid remains unreliable. Manufacturers struggle with high energy costs that reduce competitiveness, while small businesses devote scarce resources to fuel and generator maintenance instead of expanding production or creating jobs. A country with one of the world’s largest natural gas reserves should not continue to treat dependable electricity as a scarce commodity.

Natural gas offers Nigeria perhaps its greatest opportunity to build lasting energy resilience. Expanding gas infrastructure for power generation and industry would reduce dependence on imported fuels, lower production costs and strengthen manufacturing. Reliable gas supply could support industrial clusters, improve electricity generation and make Nigerian businesses more competitive. Rather than viewing gas primarily as an export commodity, Nigeria should increasingly see it as the foundation of domestic industrialisation.

The challenge extends beyond energy. The country’s continued dependence on crude oil revenues leaves public finances vulnerable to every fluctuation in international markets. A resilient economy is one in which agriculture, manufacturing, technology, solid minerals and modern services generate substantial export earnings alongside petroleum. Diversification is not simply a development slogan. It is an economic insurance policy against the volatility of global commodity markets.

This episode also underscores the importance of strategic preparedness. Countries cannot prevent geopolitical crises, but they can reduce their exposure to them. Nigeria should prioritise strategic fuel reserves, modern energy infrastructure, expanded domestic refining, gas-to-power investments, renewable energy deployment and more efficient electricity transmission and distribution. These are not isolated projects. Together, they form the foundation of national energy security.

Equally important is policy consistency. Investors commit long-term capital when they are confident that reforms will outlast political cycles. Stable regulation, transparent governance and sustained infrastructure investment are as critical to energy resilience as pipelines and power plants. Building resilience requires institutions that can implement policies consistently, regardless of changes in government.

The temporary easing of tensions in the Strait of Hormuz offers welcome relief to global markets, but Nigeria cannot afford to mistake temporary stability for permanent security. Every crisis in the Gulf that reverberates through the Nigerian economy exposes vulnerabilities that should have been addressed long ago. The objective should not be to hope that distant conflicts remain contained. It should be to build an economy capable of withstanding them.

Until Nigeria can reliably power its homes, industries and transport systems from the resources beneath its own soil, developments in faraway waters will continue to shape life in its cities and communities. A nation blessed with abundant energy resources should not remain hostage to external shocks. Building energy resilience is no longer simply an economic priority. It is the foundation of national sovereignty and sustainable development.