Nigeria Seeks Energy Partnerships Amid Iran War Oil Crisis

Nigeria is urging Gulf oil producers to invest in its energy sector as the conflict involving Iran disrupts global supply routes, highlighting the country’s potential role as an alternative source of hydrocarbons during geopolitical crises.

Nigeria’s Foreign Minister Yusuf Tuggar told Reuters the instability affecting shipments through the Strait of Hormuz, a critical maritime corridor carrying about one-fifth of global oil supply, demonstrates the need for broader energy partnerships.

The remarks come as the war involving Iran, the United States and Israel has disrupted regional shipping and triggered sharp increases in oil prices.

Tuggar argued that Gulf producers should view Nigeria as a strategic partner rather than a competitor in global energy markets.

It’s in line with what we’ve always advocated that countries which might otherwise consider us competitors should partner with us and invest so they can diversify their market share, working with us.

Nigeria’s Foreign Minister Yusuf Tuggar

The escalation of military activity around Iran has forced some exporters to halt shipments through the route, exposing the vulnerability of global energy flows concentrated in a single region.

Nigeria’s government argues that increasing investment in West African energy infrastructure could reduce reliance on Middle Eastern export routes during periods of instability.

Tuggar said Nigeria possesses substantial untapped reserves of both crude oil and natural gas, which could help diversify supply for major energy producers and consumers.

Nigeria’s oil sector has been constrained for years by underinvestment, pipeline vandalism and crude theft, which reduced production capacity across major fields. However, total production has increased to about 1.7 million barrels per day, up from roughly 1.4 million barrels per day when President Bola Tinubu took office in 2023.

Tuggar said further expansion is possible if new capital flows into exploration projects, pipelines and supporting infrastructure.

The minister noted that geopolitical shocks could either encourage or delay new investment decisions by energy producers.

It could make them want to work with countries like Nigeria that are rich in gas and oil … to diversify market share for the benefit of both countries, or they could hold back.

Nigeria’s Foreign Minister Yusuf Tuggar

Nigeria has already begun pursuing energy partnerships with Gulf countries. In January, Nigeria and the United Arab Emirates signed a Comprehensive Economic Partnership Agreement, which officials in Abuja say could unlock increased trade and investment. Investors linked to Qatar have also announced plans to invest in Nigeria’s gas sector, although specific timelines for those projects remain unclear.

Energy analysts caution that major investment commitments in Nigeria often face long approval cycles and implementation challenges. Large-scale projects can be delayed by regulatory processes, financing constraints and operational risks.

Nigeria itself has been affected by rising oil prices caused by global supply disruptions. Despite being Africa’s largest crude producer, the country still imports large volumes of refined petroleum products, which has increased domestic transport and food costs.

The price pressures have been particularly noticeable during the Muslim fasting month of Ramadan, when energy consumption tends to rise.

Tuggar said Nigeria’s vulnerability to global price swings should gradually decline as domestic refining capacity expands. The Dangote refinery, a privately owned facility, says it is operating at its nameplate capacity of 650,000 barrels per day, a level that could meet Nigeria’s domestic fuel demand.

Looking ahead, Tuggar argued that oil will remain a critical component of global energy supply.

“At the moment the world consumes about 105 to 106 million barrels per day. I don’t see that changing much anytime soon, so we need to work together so we have enough hydrocarbons available,” he said.