Rising global oil prices, driven by tensions in the Middle East, could increase revenues for West African crude exporters, but consumers across the region may still face higher fuel prices, according to James Gooder, Vice President for Crude Markets in Europe and Africa at Argus Media.
Crude oil markets have been highly volatile following conflict involving Iran, Israel, and the United States, which raised fears of disruptions to shipping through the Strait of Hormuz, one of the world’s most critical oil transit routes.
Oil prices surged to nearly $120 per barrel earlier in the week before easing slightly, but they remain well above recent levels.
According to James Gooder, Vice President for Crude Markets in Europe and Africa at Argus Media, the disruption could create opportunities for West African oil producers, including Nigeria, Ghana, and Angola, whose crude is widely traded internationally.
“It could be quite a good time to be a West African crude exporter,” Gooder told JoyNews research analyst Caleb Ziblim.
As buyers seek alternatives to Middle Eastern supplies, demand for West African crude could rise, 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.”
However, the benefits for oil exporters do not necessarily translate into relief for consumers across the region. Despite producing crude, many West African economies still rely heavily on imported refined petroleum products such as petrol and diesel. This structural dependence means rising global crude prices directly feed into domestic fuel costs.
The region’s refining capacity has expanded in recent years, including the start-up of the Dangote Refinery in Nigeria and the partial reopening of the Tema Oil Refinery in Ghana. Yet 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 essential, leaving consumers exposed to fluctuations in international oil markets.
“The cost of crude is high, but the cost of freight is also high,” Gooder explained. “Everything on a delivered basis is more expensive.”
This creates a familiar paradox for resource-producing economies. While higher oil prices can boost export revenues and strengthen government finances, households may still face rising living costs, including more expensive fuel and transport.
“Not every Nigerian is an oil producer,” Gooder said. “What people will see is higher gasoline prices at the pump and more expensive food in shops.”
For governments in oil-producing countries, the economic impact ultimately depends on how effectively oil revenues are managed and whether windfall earnings are used to deliver 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 effects likely to ripple through fuel markets across West Africa and beyond.