Nigeria’s troubled economy is expected to worsen following the lifting of economic sanctions on Iran by the United States which effectively re-admits the country into the international oil trade.
The sanctions put in place in 2012 were lifted after Iran met the terms with six world powers to stop its allegedly weaponized nuclear programme, Reuters reports. Iran has hailed the lifting of the sanction as a vindication of its power and influence in the world.
However, Iran’s joy may be Nigeria’s woes, according to Premium Times. With the lifting of the sanctions, Iran, which has the fourth largest oil reserves in the world (160 billion barrels) is expected to flood the international oil market with more oil which could worsen the ongoing glut that has reduced the price of crude from $105 per barrel to about $30 per barrel.
The re-entry of Iran into the international oil trade could also see India, Nigeria’s top buyer of crude look towards neighbouring Iran for its oil needs. A further drop in Nigeria’s oil export earnings is likely to drop the value of the naira below its present N305 to a dollar in the black market, a 43-year record.