Trump card

Eight weeks into hostilities by the United States and Israel against Iran, the endgame is up in the air and the effects yet crushing on the global economy. Nigerians aren’t being spared. A two-week ceasefire struck on 8th April between Washington and Tehran expires this Wednesday, as the gladiators prospect for enduring truce terms. Israeli attacks on Iran’s proxy militant group, Hezbollah, in southern Lebanon had threatened the ceasefire, but that has been defused with a 10-day truce between Israel and Lebanon that took effect last Thursday.

Pakistan led efforts in bringing the combatants to the negotiation table, and its officials were as at late last week running the rounds between American and Iranian authorities and consulting with other Gulf states that have a stake in the war, so to get the foes talking again. U.S. President Donald Trump voiced optimism that the war would end soon, and that a fresh round of talks would yield “amazing” results. That was cold comfort, though, because he’d never lagged in bluster. 

Meanwhile, the Strait of Hormuz – the chokepoint on Iranian coast for shipment of about 20 percent of global oil and liquefied natural gas whose closure has fuelled world energy costs – remained effectively closed to most commercial shipping traffic due to Iran’s threats and despite ongoing U.S. military blockade of Iranian ports aimed at forcing its reopening. The tanker gridlock kept global oil and gas prices high and sustained pressure on the combatants to end the conflict.

Washington had, last Monday, imposed its own blockade against Iranian ports from the Hormuz strait, six days into the two-week ceasefire deal with Iran. The blockade followed collapse of negotiations with Tehran on its nuclear ambitions and failure by the Islamic republic to honour a ceasefire term to unconditionally reopen the strait. U.S. Vice-President JD Vance flew to Islamabad, the Pakistani capital, for the talks and drew a blank. “Well, as the President of the United States showed, two can play at that game,” he told Fox News, adding: “If the Iranians are going to try to engage in economic terrorism, we’re going to abide by the simple principle that no Iranian ships are getting out either.”

In announcing the blockade early last week, Trump vowed that American forces would stop “any and all ships from trying to enter, or leave” the Hormuz strait. U.S. Central Command (Centcom) later clarified that the blockade would only impact maritime traffic entering and exiting all Iranian Gulf ports and coastal areas, stressing that U.S. forces would not impede freedom of navigation for vessels transiting through the strait to and from other ports. Iran was speculated to have laid mines in the water along the strait, and Centcom said it was embarking on mine-clearing efforts ahead of the blockade. Centcom Commander, Admiral Brad Cooper, added that U.S. forces would begin the “process of establishing a new passage” that would be shared with the maritime industry to encourage free flow of commerce.

Iranian leadership, for its part, warned that any military vessel attempting to approach the Strait of Hormuz would be considered in violation of the ceasefire agreed with Washington and would receive a firm response. Parliament speaker Mohammad Bagher Ghalibaf insisted his country would not “surrender under threats,” while the Islamic Revolutionary Guard Corps said military vessels approaching the strait would be “dealt with severely.” Not that the war had been short of incendiary rhetoric, Trump having threatened before the ceasefire deal was struck that a whole civilisation would die if Iran ignored U.S. demands. 

The sabre-rattling wasn’t exactly reassuring to mariners regarding safety of navigation through the strait and they largely stayed clear, with very few ships transiting through compared to the traffic before the war started. As at last weekend, though, there were no incidents of harm to shippers; but neither was the American blockade impregnable as touted, given reports of some Iranian-linked vessels detected in locations far outside the blockade range.

Speaking to reporters in Washington on Friday, Trump said he was “not sure” the U.S. would need to extend the ceasefire with Iran beyond 22nd April. But if the two countries can’t reach a deal before then, the war would continue. “I would say if there’s no deal, fighting resumes,” the American leader said. He had earlier given one of one of his most upbeat assessments of the war since it started, saying it was “going swimmingly and should be ending pretty soon.”

According to Trump, Iran has agreed to hand over its enriched uranium – one of the sticking points in negotiations to end the war. Fresh talks, he stated, could resume as early as the weekend, with Washington and Tehran “very close” to making a deal. Speaking at another event, he said Iran had agreed not to obtain a nuclear weapon and would turn over what he called the nuclear dust – that is, enriched uranium believed to be buried underground following US-Israeli airstrikes against the Gulf nation last year. Iran has not commented on the claim.

Oil prices moved in line with expectations of how hostilities around the Hormuz strait pans out. Prices rose in spot market trading following Trump’s blockade announcement early last week, with U.S. crude edging above $104 per barrel and Brent crude – the international benchmark – rising beyond $102. The rates, however, dropped slightly on Friday morning after the ceasefire between Lebanon and Israel came into effect. The price of the global benchmark, Brent crude, fell to $98.50 a barrel, while US crude was down to $93.60.

For us in Nigeria, the effect of the war has been double-edged. Government is making windfall revenue from high global oil price, way beyond the budget benchmark. But Nigerians are stewing in cost-push inflation resulting from the translation into exorbitant fuel price and the domino effect on other economic activities. Analysts project that the 2026 first quarter inflation figure, when released by the National Bureau of Statistics (NBS), would exceed all past computations since the market liberalisation policy of government kicked in mid-2023. And that would be all because of the US-Iran conflict.

Only at the weekend, indigenous aviators on the platform of Airline Operators of Nigeria (AON) served a notice of imminent withdrawal of flight services unless government intervenes in astronomical hike in the cost of aviation fuel. According to them, that core input in their operation has risen by 300 percent. “Currently, airline revenues are insufficient to cover the cost of fuel alone, which is only one of many operational expenses incurred daily,” the body said in a letter to senior government officials signed by its president, Abdulmunaf Yunusa Sarina. “For avoidance of doubt, this arbitrary increase has already severely impacted one airline, forcing it to ground all operations since March 13, 2026. This may become inevitable for other airlines if the situation does not change immediately,” it added inter alia.

“With dim prospects of how soon it will end, Nigeria can’t afford to just sit out the war in Iran”

Earlier last week, members of the Nigerian Trawlers Owners Association (NITOA) said more than 80 percent of their vessels had been grounded owing to high cost diesel. Diesel is the fuel used to power trawlers. Commenting on the trend, National Executive Secretary of the Fisheries Cooperatives Federation of Nigeria, Navy Captain Oladele Robinson (Rtd.) , said both the artisanal and industrial segments of the sector were being adversely affected by the high cost of diesel and petrol. According to him, operators often deploy their vessels without securing sufficient catch to justify the high cost of fuel – a situation that has driven up the prices of fish and other seafoods. At popular fish markets, there is marked decline in the volume of product supply, also fuelling costs in line with the laws of classical economics.

With dim prospects of how soon it will end, Nigeria can’t afford to just sit out the war in Iran. Government needs to play an interventionist trump card to relieve citizens. Recent reports cited reputed economist and CEO of Financial Derivatives, Bismarck Rewane, saying the challenge before the country is how to translate windfall revenue to government into structured intervention that would lessen the hardships experienced by Nigerians. “PMS (petrol) at N1,370 per litre is the new normal. The impact on various levels of economic activities is feeding into the global rate of inflation. Government must find a way of allowing the windfall to favour the people through a structured management plan,” he said, adding: “There’s a windfall in income for the government and a constriction in income of Nigerian consumers. The question is how do we transfer the income into the pockets of the people.”

The economist advised government to find a way of working with local refineries on driving down the cost of refined fuel, even if as a temporary measure. “This could help to offer transportation relief and avert rising energy costs that affect food prices and other logistic costs,” he argued.

Rewane’s proposal aligned with that by the Trade Union Congress of Nigeria (TUC), which recently urged government to use excess revenue from crude oil sales above the budget benchmark to subsidise crude supplies to domestic refineries. The union also urged government to accelerate investment in Compressed Natural Gas (CNG) infrastructure. Addressing journalists in Abuja, TUC President, Festus Osifo, argued that the twin measure should provide both immediate and long-term relief to citizens struggling with the rising cost of transportation and goods. 

Subsidy is an obnoxious word, for obvious reasons. But government shouldn’t shy away from structured intervention that can relieve Nigerians of hardships of a war in which they have no stake or say. We can’t just wait for Trump.