How Nigerian traders can survive Iran war as crisis enters eight week

The ongoing crisis involving Iran, Israel and the US has since been rippling through Nigeria’s economy, driving up fuel costs, disrupting supply chains, and forcing commodity traders to rethink how they stay in business. From petrol stations to food markets, the effects are already visible, as the higher freight costs and erratic shipping routes feed directly into consumer prices.

A new report by SBM Intelligence warns that the disruption is not a short-term shock but the start of a deeper shift in how global trade operates. The report, released on Tuesday and seen by BusinessDay, is titled “The Persian Trap: A West African commodities trader’s guide to surviving the Iran War.”

In the report, SBM analysts note that what is unfolding is a “structural realignment” that could permanently alter supply routes, pricing, and access to critical imports.

The most immediate pressure point is the fuel prices, where Nigerians have seen petrol prices jump from N830 per litre in February to about N1,325 by late March, while diesel climbed to N1,550 and above. BusinessDay earlier reported that transport fares have surged, tripling along some corridors, compounding the cost burden for traders and consumers alike.

The findings of this report draw from a survey of 220 traders across nine Nigerian cities, supported by real-time tracking of petrol and staple food prices, as well as open-source shipping data. Together, they paint a picture of a market already under strain and increasingly exposed to global volatility.

Shipment along Strait of Hormuz remains uncertain

At the centre of the disruption is the Strait of Hormuz, a critical artery for global oil and gas flows. With commercial traffic dropping sharply amid ongoing hostilities, shipping has become both more expensive and less predictable, plummeting from 135 vessels to 4 vessels per day.

For Nigerian traders, that uncertainty is now feeding directly into delayed shipments, higher landing costs, and tighter margins.

With the Red Sea now a “shooting gallery,” as per SBM, the traditional routes that fueled West African markets are no longer viable for the foreseeable future. To survive this “new normal,” the firm said experts and successful local traders must re-engineer how they do business by exploring these lifelines.

The most immediate defensive move is a shift to contingency inventory management, with traders holding at least 30 days of stock for essential commodities.

SBM’s survey of 220 traders across nine Nigerian cities found that those who stocked up before the March price spike were the only ones who avoided buying at peak prices or shutting down operations. While storage comes at a cost, the report argues that “the cost of storage is less than the cost of buying at peak prices.”

For small and medium-scale traders, individual procurement is becoming increasingly difficult under current conditions. The report recommends the formation of bulk buying groups as a practical workaround in these times. “Pooling resources reduces per-unit costs,” granting leverage needed to negotiate better rates. “The survey showed this strategy works.”

With traditional shipping lanes through the Strait of Hormuz and the Suez Canal now exposed to “asymmetric attack” risks, traders are recommended to consider looking closer to home. The report recommends a pivot toward overland corridors and the African Continental Free Trade Area framework, arguing that West African ports can serve as viable alternatives to Red Sea routes and reduce exposure to Middle Eastern disruptions.

Moving away from fuel to other energy sources

“Nigerian petrol prices will remain above N1,200 per litre for the foreseeable future,” SBM analysts noted in the report, warning that reliance on diesel-heavy logistics is fast becoming an economic liability. As fuel costs stay elevated, businesses should consider long-term adjustments, including investment in solar-powered cold storage and a gradual shift of long-haul freight toward rail, where possible. “The economics of diesel are permanently worse,” it said.

Access to timely and reliable information is emerging as a competitive edge and will become more pronounced. SBM found that 34 percent of traders are now willing to pay at least N1,000 monthly for services that help distinguish legitimate taxes from extortion.

The report adds that similar tools for price and transport alerts could prove equally valuable, as traders are forced to price for volatility and build risk premiums into their quotes. “The conflict will continue to disrupt shipping, fuel prices and supply chains for the remainder of 2026. Factor a sustained premium into your risk calculations… Customers will adjust,” the report said.

What SBM Intelligence describes as the “Persian trap” is, at its core, a slow-burning strategic miscalculation on the part of the US and Israel. It rests on the assumption that Iran can be destabilised in the same way regimes led by Muammar Gaddafi or Saddam Hussein once were.

But SBM analysts argue that this comparison misses the point. Iran is not built around one man, but around a dense web of religious, military and political institutions designed to absorb shocks, including the loss of top leadership. Instead of triggering collapse, external pressure appears to be hardening the system. Power flows through structures such as the Islamic Revolutionary Guard Corps, whose influence spans both security and the economy, tying the state’s survival to the interests of those who run it.

“The CIA knew this before the war began. In the run-up to the attacks, the agency assessed that even if Khamenei was killed, he would likely be replaced by hardline figures from the Islamic Revolutionary Guard Corps. That is exactly what happened,” the report wrote. As the war drags on, what began as a potential quick intervention is increasingly resembling a war of attrition, stretching supply chains, energy markets and shipping routes far beyond the Middle East.

For West Africa, the consequences may be indirect but immediate. A conflict with no clear off-ramp means persistent volatility in fuel prices, freight costs and commodity flows, with traders and consumers alike forced to adjust to a prolonged period of uncertainty.

“The difference between a crisis and a catastrophe is preparation,” the report said.