US-Iran Crisis Could Spike Global Freight Rates by 40%

A maritime research group, SEREC, has projected that the ongoing crisis between the United States and Iran could lead to a 15-40% increase in global freight rates. This escalation is attributed to the geopolitical risks associated with the Strait of Hormuz, through which approximately one-fifth of the global crude oil supply is transported daily.

The group, led by Mr. Eugen Nweke, indicated that prolonged disruptions could trigger sustained volatility in oil prices, potentially reaching between $110 and $140 per barrel.

While Nigeria may benefit from short-term fiscal gains with elevated crude prices estimated at $120 per barrel, the group warns that inflation could rise by 3-5% due to increased logistics and import costs. Additionally, the depreciation of the currency could intensify these pressures.

SEREC emphasizes the importance of prudent fiscal discipline and suggests that Nigeria should manage its refining capacity strategically to stabilize its economy amid external shocks.