The hope for cheaper fuel has been dampened after Iran closed the Strait of Hormuz again on Saturday, reversing the brief optimism that followed its reopening on Friday.
Iran’s military declared the Strait of Hormuz blocked again on Saturday, April 18, hours after it was reopened. The move is a direct response to the U.S. naval blockade of Iranian ports, which Washington says will remain until a broader deal is reached.
Tehran described the U.S. naval blockade as an act of “piracy” and a violation of the recent ceasefire agreement.
Consequently, Iran’s Islamic Revolutionary Guard Corps (IRGC) has stated that the Strait has “returned to its previous state,” meaning it is effectively closed to ships it deems unauthorised.
According to a report by Iranian State media, officials have stated that any future passage will be strictly controlled, allowed only on “designated routes,” with “Iranian authorisation,” and only for commercial (not military) vessels not affiliated with hostile countries.
The U.S. blockade is described as targeting only ships coming to and from Iran, but this is viewed by Tehran as a hostile act that justifies its own restrictions.
The impact of this standoff is already being felt on the water, with at least one significant incident reported.
According to a UK maritime agency, Islamic Revolutionary Guards Corps (IRGC) ships opened fire on a tanker as it sought to transit through the strait on Saturday.
In a post on X, the IRGC’s navy command wrote: “As long as the movement of vessels from Iran and to Iran is under threat, the status of the Strait of Hormuz will remain as it was previously. Any breach of commitments by the United States will receive an appropriate response.”
Iran had reopened the waterway following the announcement of a 10-day ceasefire between Israel and Lebanon on Thursday.
Impact of the closure on Global Oil Prices
The Strait of Hormuz is one of the most critical chokepoints in the world, handling about 20 per cent of global oil and LNG trade.
Any closure or restriction immediately disrupts energy supply, often pushing oil prices higher and affecting economies worldwide.
The announcement of the reopening had led to a sharp drop in oil prices from about $100 to around $90 as of Saturday, April 18.
The decline in global oil prices following the reopening of the Strait had raised hope of relief to consumers that domestic prices of fuel would come down.
The development has created significant volatility. After a sharp drop in oil prices on Friday, following the reopening news, prices are expected to face renewed upward pressure as shipping companies and insurers reassess the risk of transit through what remains a highly contested chokepoint.
Impact on the Nigerian Market
For Nigerians, the closure translates directly to the pump and the marketplace.
Earlier projections suggested petrol could drop about ₦1,000/litre if stability held. However, with the Strait closed again, that scenario is now uncertain or delayed.
Though Nigeria now has a major oil refinery (Dangote Refinery), it depends on the import of refined petroleum products to sufficiently meet domestic fuel demands.
Analysts have said that the surge in global crude prices and insurance premiums for tankers (war-risk cover) drives up the landing cost of petrol. Also, while the Dangote Refinery has provided a domestic buffer, it is not immune to global oil pricing dynamics. Recent adjustments saw gantry prices for petrol rise to ₦1,275 per litre before dropping to ₦1,200, reflecting the high cost of crude and logistical challenges in the ongoing Middle East conflict.
Wider Economic Consequences
The closure has broader economic implications, including food costs, logistics, and aviation.
Experts have observed that the Strait is a primary hub for the global fertilizer trade (specifically urea). Continued disruptions are expected to keep the cost of basic food items like corn and wheat high, as both production and transportation costs remain elevated.
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On logistics and aviation, observers have noted that jet fuel prices have doubled in different regions of the world over the last month. In Nigeria, airline operators lamented that aviation fuel has risen by almost 300 per cent and threatened to shut down flight operations if the crisis was not addressed. However, following the intervention of the Federal Government through the Minister of Aviation and Aerospace Development, Festus Keyamo, the domestic airline operators has agreed to temporarily suspend the planned action pending the outcome of a stakeholders’ meeting to be convened by the Minister on Wednesday, April 22.
Intercity transport has seen a significant rise in cost within the period following the hike in petrol prices. In parts of Nigeria, petrol has reached between ₦1,420 and ₦1,500 per litre at independent stations. National oil company outlets are hovering around ₦1,369 per litre.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in Mass Communication. He can be reached via @VICTOREZEJA on X