Rising oil and gas prices may provide short-term revenue gains for producers in the developing world; however, the head of the United Nations trade agency has cautioned that these benefits are likely to be temporary. Pamela Coke-Hamilton, the executive director of the International Trade Centre (ITC), informed Reuters that countries such as Nigeria, Kazakhstan, Brazil, Angola, and Libya could experience increased oil revenues. Nevertheless, the gains are expected to be limited, as all but Kazakhstan are net importers of refined petroleum products. This situation means that higher prices could still negatively impact their economies.
This warning comes amid increased volatility in the global energy market, following the collapse of US-Iran peace talks and the announcement of a blockade of the Strait of Hormuz. Oil prices surged after the breakdown in negotiations, with both Brent crude and West Texas Intermediate exceeding $100 a barrel before experiencing a retreat in subsequent trading sessions. Nigeria, Africa’s largest oil producer, is currently benefiting from this price rally. The federal government had projected a crude oil price benchmark of $64.85 per barrel in its 2026 budget.
However, the International Monetary Fund (IMF) has indicated that the advantages of higher oil revenues will be counterbalanced by rising shipping costs and broader supply chain disruptions linked to the ongoing conflict. On Tuesday, the IMF revised Nigeria’s 2026 growth forecast down to 4.1 percent, attributing this adjustment to the combined effects of increased fuel and fertilizer prices, elevated shipping costs, and war-related supply shocks. Pierre-Olivier Gourinchas, the IMF’s chief economist, highlighted that energy-importing countries in Sub-Saharan Africa are particularly vulnerable, as growth downgrades and inflationary pressures are already becoming evident.
Denz Igan, head of the IMF’s World Economic Studies Division, explained that while higher oil prices may provide some offset, the overall impact is expected to result in weaker growth in 2026, with only a modest recovery anticipated in 2027. In response to these challenges, the IMF is coordinating with the International Energy Agency and the World Bank to monitor energy market disruptions and assess the needs of individual countries in the current environment.
Comments are closed for this story.