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By Emma Njoku
ESCALATING tensions involving the United States, Israel, and Iran are once again placing global oil markets on edge, with significant implications for Nigeria’s economic outlook in 2026.
Managing Director of Legendary Foreshore,
Victor Ameh, who made the assertion, noted that while the conflict remains geographically distant, its ripple effects are being felt in energy prices, foreign exchange dynamics, and fiscal planning in oil-dependent economies like Nigeria.
Ameh echoed his views in a recent research on the “2026 Real Estate Outlook For Investors, where he warned that the evolving geopolitical situation could deepen existing economic pressures even as it presents short-term revenue opportunities.
He said: “Oil prices have historically responded sharply to instability in the Middle East, particularly when major producers or strategic shipping routes are involved. Iran’s role as a key player in the global oil supply chain, combined with its geopolitical positioning near the Strait of Hormuz, a critical transit route for crude exports, means any escalation raises fears of supply disruptions.
“For Nigeria, higher oil prices can translate into increased government revenue, offering temporary relief for public finances. However, the benefits are far from straightforward. The country’s economic structure has changed significantly in recent years. Despite being a major oil producer, Nigeria imports a large portion of its refined petroleum products. This means that rising global crude prices often lead to higher domestic fuel costs, feeding into inflation and increasing the cost of living.
“In the current economic climate, characterised by high inflation, currency volatility, and ongoing reforms, such external shocks could complicate stabilisation efforts”.
Ameh said that foreign exchange volatility, one of the key challenges identified in the report, is closely tied to oil market performance.
“When global oil prices fluctuate due to geopolitical tensions, Nigeria’s currency often reacts, affecting import costs across multiple sectors, including construction.
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Building materials, many of which are imported, become more expensive when the naira weakens. This drives up construction costs and can stall projects already operating on tight margins. Developers are, therefore, increasingly exposed to global geopolitical risks, even when operating purely within domestic markets.
“Additionally, higher energy costs, linked to global oil price movements, are raising operational expenses for households and businesses. Power generation, transportation, and logistics all become more expensive, further squeezing disposable income. This has a direct impact on housing demand. As households allocate more of their income to basic expenses like fuel and electricity, their ability to afford rent or home purchases declines. The result is a tightening of the real estate market, particularly in higher-priced segments”.
Ameh also averred that the geopolitical situation also influences investor sentiment just as international investors tend to adopt a more cautious stance during periods of global uncertainty, especially in emerging markets. This, he said, could limit capital inflows into Nigeria’s real estate and infrastructure sectors at a time when funding is already constrained.
“At the same time, there are potential upsides. Sustained high oil prices could improve Nigeria’s external reserves and strengthen government revenue, creating room for increased spending on infrastructure. Such investments, if effectively executed, could support long-term growth in sectors like housing and logistics.
“However, analysts caution that these gains depend heavily on policy discipline and efficient resource management. Without structural reforms, temporary windfalls from higher oil prices may not translate into lasting economic benefits.
“The intersection of global geopolitics and domestic economic realities underscores a broader theme emerging in 2026: Nigeria’s economy is increasingly interconnected with global events.
“The real estate sector, once driven largely by local dynamics, is now being shaped by factors ranging from international conflicts to currency markets. Developers, investors, and policymakers must navigate this complex environment, where decisions made thousands of miles away can influence project costs, financing conditions, and consumer behaviour at home.
“As tensions in the Middle East continue to evolve, Nigeria faces a delicate balancing act, leveraging potential gains from oil price increases, while managing the inflationary and economic risks that accompany them.
“In this environment, resilience will depend not just on resource wealth, but on the ability to adapt to a rapidly changing global landscape.”
