A report by Estate Intel has stated that higher diesel costs reduces developer profit margins and increase property sale prices.

Estate Intel explained that the recent report titled ‘Impact of the USA/Iran War on Nigeria’s Real Estate’ examines the impact of the ongoing crisis on Nigeria’s construction sector, real estate activities, and the nation’s economic outlook for the year.

It stated that, in doing this, Estate Intel consulted experienced professionals from various industries to share insights.

In the report obtained by The PUNCH, Estate Intel explained that Nigeria’s construction sector, real estate activities, and economic outlook are being impacted by the US/Iran conflict, adding that rising oil prices are causing inflation and increasing energy and construction costs.

It added that the situation has resulted in increased freight charges, higher insurance costs, and shrinking profit margins for developers, ultimately impacting project timelines and delivery schedules.

“Higher diesel costs will also reduce developer profit margins and increase property sale prices,” the report stated.

Estate Intel, nevertheless, stressed that higher oil revenues may stimulate demand for property assets, but borrowing is expected to increase due to rising debt-servicing costs.

According to the report, the U.S./Iran conflict escalated in February 2026 when U.S.-Israeli airstrikes hit Iranian military leaders and nuclear sites, stressing that, in response, Iran closed the Strait of Hormuz, “triggering a major global oil crisis that exposed Nigeria to a mix of macroeconomic challenges and opportunities, raising risks and uncertainty across Nigerian oil-linked sectors, particularly real estate and construction.”

“Rising oil prices are increasing energy and construction costs, causing inflation. Fuel pump prices in Nigeria rose sharply from N840 per litre in February 2026 to over N1,200 per litre in March 2026, an increase of over 30 per cent in a single month. As a result, recent data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority shows that petrol consumption declined from 56.9 million litres per day in February to 47.3 million litres per day in March. Since the war began, diesel prices have also risen from N1,300 in January to over N1,700 in April 2026, increasing transport costs for raw materials and passing additional costs to developers and end-users. Higher diesel costs will also reduce developer profit margins and increase property sale prices,” the report stressed.

The Chief Executive Officer of Cutstruct, John Oamen, told Estate Intel in an interview that “tensions around the Strait of Hormuz have had a limited direct impact on Nigeria’s construction supply chain so far but are increasing indirect risk exposure. While most Nigeria-bound shipments do not rely exclusively on Hormuz routes, instability in the corridor is already feeding into higher freight costs and rising insurance premiums, particularly through war-risk surcharges. The market is also experiencing minor shipment delays as global carriers adopt more cautious routing strategies.”

He added that although these disruptions have not yet materially constrained supply, they are increasing volatility in logistics costs and delivery timelines, ultimately driving up project costs and extending completion schedules across the real estate sector.

“The same goes for service charges allotted to offices and multi-tenanted residences in prime areas, which will increase as maintenance and operational costs rise. Companies may cut costs as expenses rise and adopt a hybrid work model to benefit their staff while reducing operational costs,” he said.