Middle East crisis and soaring prices of goods

The ongoing war in the Middle East, involving United States of America, Israel and Iran, is inevitably affecting the economic prospects of almost every country in the world. The US and Israel had launched joint strikes on Iran on February 28, 2026, targeting the country’s leadership, military sites, and missile infrastructure, with a mission to destroy the military strength of Iran. Iranian supreme leader, Ali Khamenei, and some military chiefs were killed in the attacks.

Since the war started, the Middle East has not been the same, and the world is suffocating as a result of the attendant harsh economic realities. Oil supply has been disrupted, making prices to soar in some countries by 100 per cent, resulting in hardship on the already strained economies of the world. The Iranian forces have taken over the Strait of Hormuz, a symbolic site where 30 per cent of global trade crosses. This means that many vessels conveying multi-billion dollar oil are held hostage there, and in response, shipping firms have hiked their charges. The ripple effect of these negative developments has affected food supply, airfares and prices of other essential commodities.

Airlines are losing money daily. International transportation has also been affected as passengers are stranded in different parts of the world. The United States President, Donald Trump, is adamant that Iran will capitulate, but Iran is not showing any sign of surrendering. This leaves the world in a quagmire and many people fear that the current Middle East crisis could snowball into a major global catastrophe.

In Nigeria, the economic impact of the Middle East crisis is obvious. The pump price of petrol has increased and now sells between N1,250 and N1,500 per litre, depending on the location. Also, prices of food and pharmaceuticals have increased astronomically. The aviation industry is not left out. Given that the price of aviation fuel has increased, the cost of local flights has also increased.

Last week, the Mediterranean Shipping Company (MSC) informed its customers that a $4,000 war surcharge has been imposed on cargoes heading to Nigeria. This means that the prices of goods imported into the country will increase, and it will also directly affect the purchasing power of the naira, which is struggling to maintain a stable value in the international market. Also affected are fabrics imported from Asia. Importers are complaining that their shipments are stranded in the Middle East, therefore retail prices have skyrocketed.

War risk surcharge is an additional cost to sea freight or insurance premiums when a shipment is deemed high-risk due to political instability or conflict in the shipping route or destination. It is reported that Nigeria pays a minimum of $500 million annually before the new MSC surcharge. Indeed, the Middle East crisis is affecting Nigeria in disturbing dimensions and as long as the war continues, the situation may get worse.

The Middle East crisis paints a grim economic prospect for third-world countries and other countries that are heavily dependent on Western countries for imports. The direct victims of these harsh economic realities are the poor masses, who are already struggling to survive. In Nigeria, with an estimated multi-dimensional poverty population ratio of 62 per cent, the optics are bleak. It goes to show how a major crisis in the world can affect other parts of the world that may not be directly connected to the crisis.

Although the war is affecting almost every country in the world, developed countries in Europe, North America and Asia may not be adversely affected because they have economic safety nets to cushion the effects of the war. The big question is: if the war continues and assumes a global dimension, does Nigeria have available safety nets to cushion the adverse economic effects on the citizens? Is the Nigerian government already thinking of providing a Plan B, in the event the war snowballs into a major global crisis? If reports from the White House are anything to go by, the US is not ready to back down on its assault on Iran any time soon. Also, Iran has defied all the odds to stand up to the US. This does not portend well for the world and its economic realities.

As long as the war continues, the world cannot be the same. It is beneficial for the world to be at peace rather than to be enmeshed in crisis. The war must come to a deserved end for the world to be at peace. The whole world has condemned the war. US citizens and many politicians in the country do not support the war. The UK, Germany, Italy, Belgium, Spain and many other powerful political blocs have all condemned the war, each revealing its futility.

Just as Nigeria, many countries are currently affected by the war. The Nigerian government should, as a matter of urgency, devise a means to cushion the effects of the war through food and energy security. Nigeria is not directly involved in the war and therefore should not suffer the consequences of the war. Nigeria must learn from what happened during the COVID-19 pandemic, which caught the country unawares. Global crisis not directly connected to us should not catch Nigeria unawares. The race must begin now to save the masses from the negative economic fallout of the war.