Global oil prices have surged more than 40% to above $100 per barrel since the outbreak of the US-Israeli war on Iran in early March 2026. The escalation has caused major disruptions to shipping through the Strait of Hormuz, a critical chokepoint that handles about one-fifth of the world’s crude oil supplies. Traffic through the strait has largely stalled, with reports indicating around 20 vessels attacked, leading to halted or rerouted shipments and heightened fears of prolonged supply shortages.
The ripple effects are being felt worldwide, but the fallout has hit African economies particularly hard as rising energy costs increase operating expenses and fuel inflation. In Nigeria, small and medium-sized enterprises (SMEs)—defined by the National Bureau of Statistics as businesses with 10 to 199 employees and assets (excluding land and buildings) valued between 5 million and 500 million naira—are facing severe strain.
These businesses already contend with longstanding challenges, including limited access to finance and inadequate infrastructure. The sharp increase in fuel prices, driven by the conflict in Iran, has become an overwhelming burden, described by affected operators as a “pendant of albatross.”
Miss Oluwanifemi Obanure, a business owner who relocated her operations in January 2026 to a location with reliable power supply to avoid generator costs, found her plans upended. Power outages forced her to switch to a generator, and just as fuel expenses mounted, prices skyrocketed due to the war. “I was almost at the verge of giving up when the price of the fuel went up and I heard it was because of the war in Iran,” she said. Depressed by the situation, she posted about her struggles online, where the message went viral. An anonymous donor stepped in to provide solar power for her business. “If not for the solar, by now I would have packed up,” she added.
However, such fortunate interventions are rare. Most SMEs lack similar support and are struggling to survive the economic pressures.
Mr. Abdulwasiu Ontoye, a welder in Soka, Abuja, described his ongoing difficulties. Before the war, he purchased fuel at around 1,600 naira per liter, but prices escalated sharply. At official stations, it rose to 1,650 naira, while black market rates jumped from 1,200 naira to 2,000 naira per liter. Despite these increases affecting his materials, motor transport, and overall costs, he has resisted raising service prices to avoid losing customers. “We don’t change our price but now the materials we are using the price change… I have to keep managing it. And there’s nothing I can do,” he explained.
Nigeria’s chronic poor power supply compounds the crisis, forcing widespread reliance on generators. “If you say want to depend on light the light is not constant… Everywhere now is dark. It’s dark out there only gen everywhere,” one business operator noted.
As the Gulf conflict persists, global energy supplies remain under threat, weakening the world economy. In Nigeria, fuel costs have spiked by 39.5% according to global petrol prices data, with pump prices varying widely but often exceeding 1,000–1,300 naira per liter in many areas. SMEs like those of Miss Obanure and Mr. Ontoye urgently require government intervention to act as a “good Samaritan” in easing the burden, through targeted relief or support measures to help businesses weather the storm.