The price of crude oil has dropped sharply after the United States and Iran reached a deal, with former President Donald Trump signaling that the agreement would open the door for Iranian oil to flow back into global markets.
For Nigeria and other African oil-producing nations, the timing stings. A surge in crude revenues had been offering some breathing room for economies that lean heavily on oil exports, and that window now looks like it is closing fast.
More Iranian supply hitting the market means more competition, and more competition means lower prices. Countries whose national budgets are built around a certain price per barrel will need to start doing the math all over again.
The question now is how quickly prices stabilise, and whether Nigeria and its neighbours have enough cushion to absorb the shift without painful cuts to public spending. Watch this space.
Originally published by BusinessDay.