Rising global oil prices driven by tensions in the Middle East could boost revenues for crude exporters in West Africa, but consumers across the region may still face higher fuel costs, according to James Gooder, vice president for crude markets in Europe and Africa at Argus Media.
Crude markets have been volatile since conflict involving Iran, Israel and the United States raised fears of disruptions to shipping through the Strait of Hormuz, one of the world’s most important oil transit routes.
Oil prices surged to nearly $120 per barrel earlier in the week before easing, though they remain well above recent levels.
Gooder said the disruption could create opportunities for oil producers in West Africa, including Nigeria, Ghana and Angola, whose crude is widely traded on international markets.
“It could be quite a good time to be a West African crude exporter,” he said in an interview with JoyNews’ Research analyst, Caleb Ziblim.
As buyers look for alternatives to Middle Eastern supplies, demand for West African crude could increase, particularly from Asian importers such as India and China.
Unlike some suppliers facing geopolitical restrictions, oil from West Africa can move relatively freely across global markets.
“The advantage West African exporters have here is that nobody is putting them under sanctions,” Gooder said. “There’s no limit to where a cargo can go.”
Yet the benefits for oil exporters do not necessarily translate into relief for consumers across the region.
Despite producing crude oil, many West African economies still rely heavily on imported refined petroleum products such as petrol and diesel. This structural dependence means higher global crude prices typically feed directly into domestic fuel costs.
The region’s refining capacity has expanded in recent years, including the start-up of the large Dangote Refinery in Nigeria and the partial reopening of the Tema Oil Refinery in Ghana. However, domestic production remains insufficient to meet demand in a region with a rapidly growing population and rising energy consumption.
As a result, refined fuel imports remain a key part of the supply chain, leaving consumers exposed to swings in international oil markets.
“The cost of crude is high, but also the cost of freight is high,” Gooder said. “Everything on a delivered basis is more expensive.”
This creates a familiar paradox for resource-producing economies. Higher oil prices can increase export revenues and strengthen government finances, but households may still face rising living costs as fuel and transport prices climb.
“Not every Nigerian is an oil producer,” Gooder said. “What people will see is more expensive gasoline at the pump, more expensive food in the shops.”
For governments in oil-producing countries, the economic impact ultimately depends on how effectively oil revenues are managed and whether windfall earnings translate into broader economic benefits.
For now, analysts say the trajectory of oil prices will depend largely on developments in the Gulf.
If disruptions around the Strait of Hormuz persist, crude markets could remain volatile, with the effects likely to ripple through fuel markets in West Africa and beyond.