Are you paying attention to the emerging paralysis which is breeding among the US, Israel and Iran. There is a high likelihood that oil prices will spike, and a short war could be triggered. Possibly, you might have read it, but over the last few days, many things are happening. Really bad stuff.
Besides Gaza, there was a bombing of an Iranian consulate which killed some of its soldiers. Iran plans to return fire against Israel which it had accused of the attack. Today, a ship was kidnapped.
Meanwhile in Ukraine, Russia has opened version 2 of whatever it wants to do there. Depending on how things play out, we do not expect prices of food to come down since this war seems to be “starting”.
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If Iran and Israel go to war, the US is expected to join. Also Russia will likely participate. Oil prices could hit $150 per barrel. If that happens, Naira can hit N600/$ because Naira will strengthen provided Dangote Refinery will refine as fast as possible to avoid a need for Nigeria to import refined petroleum products.
Summary: if you are hedging against the Naira, be careful because the cloud is gathering positively for the Naira, as Naira does well when massive volatility happens in the Middle East. With Dangote Refinery in-house, Naira could outperform. Of course, we do not pray for wars; we hope the world can find ways to live in peace!
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If this war breaks out, Nigeria will make MORE money on its oil export, and if Dangote Refinery works as expected, Nigeria will not spend a lot on imports. Ceteris paribus, you have a positive balance of payment and that will strengthen Naira. This is unlike in the past when high crude oil prices made petrol imports high, canceling the effects. With Dangote Refinery, we can have double positives here. I think that the Naira will appreciate against the USD if they continue the engagement in the Middle East.
From Twitter summary:
In a significant development near the Strait of Hormuz, Iranian special forces seized the Israeli-linked container ship, MSC ARIES, on Saturday. This action, reported by various news outlets and captured on video, has sparked international attention and concern. The ship, managed by Zodiac Maritime and linked to Israeli billionaire Eyal Ofer, was redirected into Iranian territorial waters. The incident has raised tensions in the region, with the international community closely monitoring the situation.
Are you paying attention to the emerging paralysis which is breeding among the US, Israel and Iran. There is a high likelihood that oil prices will spike, and a short war could be triggered. Possibly, you might have read it, but over the last few days, many things are happening.… pic.twitter.com/OJNllyhBS0
— Ndubuisi Ekekwe (@ndekekwe) April 13, 2024
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