Operation Epic Fury and what is in it for Nigeria.

Operation Epic Fury and what is in it for Nigeria.

by Oluremi Adegbulugbe

Let me start by saying that may the souls of all the religious leaders, political leaders, military apparatchiks, soldiers and civilians who are no longer with us since the outbreak of military conflict in Iran, rest in peace. May Almighty God forgive their sins and show mercy.

From the perspective of global economy, a lot has happened since the outbreak of war in Iran.
Barely 2 days after the war started, I alerted Nigerians to prepare for N1,000 per litre pms pump price. That has happened.
For the first time in over 2 years, crude oil prices have crossed the $100 per barrel line.
Roughly 15% of global crude oil supply is off the market. Iran’s 3.25 million barrels daily production is off the market.
Qatar, a global leader in the supply of LNG has shut down production.
Iraq has also shut down production on some oil fields citing storage limitations.
Countries such as KSA that are in production have issues with transportation because Insurance companies have withdrawn insurance coverage for oil tankers passing through the Strait of Hornuz.
Indeed, a lot has happened in a very short time.
Now the big question is that what will Nigeria do with this window of economic opportunity vis a vis rising crude oil price snd the scarcity of crude oil.

*Excess Crude Oil Account:*
Nigeria 2026 crude oil benchmark price is $64.85 per barrel. It is very unlikely that crude oil prices will fall below $85 per barrel for many months to come, certainly not in 2026.
Will Nigeria save the additional revenue as Norway is doing or will Nigeria embark on additional reckless spending spree and squander this excess crude oil revenue.
Let me be clear, except our leaders do not wish Nigeria well and except our leaders are human hyenas , any penny earned about the $64.85 budget benchmark must be put aside for future use and to offset any negative shocks associated with volatile crude oil price.
Under the GEJ administration, bad leaders led by then Governor Amaechi dragged the FG to court demanding the sharing and looting of the excess crude oil money accumulated over the years beginning with OBJ administration.
Today, the same Rotimi Amaechi is seeking to become President and i say, God forbid.
Nigeria must reactivate our Excess Crude Account (ECA) without further delay and not miss out or misuse this “window of opportunity”.

*Strategic Petroleum Reserve:*
We have all seen the disruption to global crude oil production and transportation.
This development has led me to ask the question “Does Nigeria have a Strategic reserve of criude oil?”.
The Government of Anerica has a strategic petroleum reserve of 715 million barrels managed by the Department of Energy. It implies that USA can do without crude oil imports for many months. Many countries also have SPR.
It is time for Nigeria to start building and accumulating a SPR that can not only contribute to energy security but also translate into serious revenue and ROI in times of global scarcity.
Our Leaders must be strategic and think about tomorrow for Nigeria.
Governance is not about buying cars and cooking utensils every year.

*Increased Oil Production*
Nigeria will benefit revenue wise from the recent increase in crude oil prices.
Nigeria can even benefit more if we increase and or maximise production at this time. Are there any low hanging fruits oil wells that can be activated in the short term to increase production. This is where the services of oil
Service companies like SLB, Weatherford and Baker Hughes come handy.

*Inflation*
Nigeria must plan to address the inflation that is associated with increase in crude oil prices.
With the recent increase in PMS pump Price, transportation costs is likely to go up and this will trigger increase in cost of food. The CBN must be prepared with the right monetary policies.

*Closing:*
In my opinion, the military conflict in Iran is likely to come to an end in about a week from now.
Unfortunately the impacts of this 3 weeks conflict will take months to normalise.
Crude oil prices will hover around $100 per barrel for many months because it will take years to restore Iran’s 3.25 million barrels daily production capacity.
It will take sometime for production in Qatar, KSA and Iraq to normalize.
Nigeria must maximize effectively the window of opportunity before us.
We must do 2 things, ECA and SPR.

Thank you for your time.
God bless Nigeria, a shining city on a Hill.

Olufemi Adegbulugbe
Calgary, Alberta
09 March 2036.