By Saidu Abubakar
The recent escalation involving US interests and its Middle East allies — including the reported incident near the Strait of Hormuz — has understandably drawn global attention. This is the expertise assessment of a renown petroleum economist, Emeritus Prof. Wumi Iledare.
“However, we must resist the instinct to interpret these developments through historical memory alone,” he said in the assessment Valuechain platform.
“This is not 1973,” he noted, adding that “It is not the Iran–Iraq war or the Gulf War era. Today’s oil market is more diversified, more liquid, and more responsive. Under rational expectations, markets price probabilities and duration of disruption — not simply geopolitical symbolism.”
According to him, the Strait of Hormuz remains a critical chokepoint, and any instability there commands sensitivity. But sustained oil price increases require sustained physical disruption — blocked shipping lanes, damaged infrastructure, or prolonged export outages.
“Absent that, what we are likely seeing is a temporary geopolitical risk premium. OPEC does not set prices; markets do. And markets are capable of distinguishing between headline risk and structural supply loss,” emphasized Prof Iledare.
“For Nigeria, any short-term strengthening of crude prices — even toward $80 — should be treated as transitory. Oil price windfalls have historically proven temporary, while price corrections tend to be more enduring.”
He observed further that fiscal discipline, therefore, remains essential, while warning that “revenue above the benchmark should reinforce stabilization buffers, not expand spending commitments. In moments of conflict, calm economic judgment must prevail over historical reflex.”
