Trump takes action on Christmas Eve! US air strikes on Nigeria, targeting oil and rare earths?

Donald Trump ordered airstrikes against Nigeria on Christmas Eve, marking a sharp escalation of tensions between the United States and West Africa's largest economy. While the military operation was ostensibly carried out to combat ISIS terrorism and protect religious freedom, its underlying rationale points directly to shifts in the global energy landscape and the scramble for supply chains of critical strategic minerals.

According to Xinhua News Agency, US President Donald Trump posted on social media on the evening of the 25th that the United States had launched a "powerful and lethal" strike against Islamic State terrorists in northwestern Nigeria on the same day.

The Trump administration's series of threats and pressure on Nigeria since November this year came at a time when Nigeria's refining capacity was approaching self-sufficiency and the development of rare earth resources was accelerating. Analysts point out that although counter-terrorism is the stated reason, the operation is underpinned by a complex web of economic interests, potentially targeting Nigeria's oil independence and rare earth mineral resources.

As the United States' major trading partner in sub-Saharan Africa, Nigeria's financial assets had already fluctuated sharply amid threats of US sanctions. This move may not only push up Nigeria's sovereign borrowing costs but also trigger a flight of foreign capital and further depreciation of the naira, thereby undermining the commercial interests of US companies including Chevron operating in Nigeria.

## Undermining Nigeria's Energy Independence

The airstrikes were not without warning. As early as November, Trump warned the Nigerian government that the US would take swift military action if it failed to stop violence against Christians.

The Robert Lansing Institute for Global Threats and Democracy analyzed at the time that the US operation was closely linked to a range of economic interests centered on securing access to oil and mineral resources.

According to analysis by *Africa Today*, the timing of the US action is no coincidence, coming as Nigeria's Dangote Refinery (with a daily capacity of 1.4 million barrels) announced it was operating near full capacity.

For a long time, the United States has been Nigeria's major supplier of refined oil products, which constitute a key component of US exports to Nigeria. In 2023, US exports to Nigeria amounted to approximately $4.2 billion, including substantial volumes of refined oil. The Dangote Refinery aims to fully meet Nigeria's domestic demand and export surplus capacity, which will directly erode the established market share of the US Western refining industry in West Africa.

Data shows that while the US goods trade deficit with Nigeria narrowed significantly in 2024, the US maintained a substantial surplus in services trade. Disrupting or derailing Nigeria's path to energy independence is interpreted as a means to protect US export interests.

## A New Battleground for Rare Earth Competition

A more far-reaching strategic consideration lies in the supply chain security of rare earths and critical metals.

According to an analysis report released by Ecofin, Nigeria boasts abundant reserves of minerals such as monazite (rich in cerium, lanthanum, and neodymium), lithium, cobalt, and nickel—all critical raw materials for electric vehicles and US defense technology.

The impact of geopolitical frictions on financial markets has already emerged. Following Trump's first military threat in November, the price of Nigeria's US dollar-denominated sovereign bonds maturing in 2047 plummeted by 6 cents in a single day, making them one of the worst-performing bonds among global emerging markets at that time. Meanwhile, the Nigerian naira depreciated by 1.2% against the US dollar at one point, registering its biggest drop in six months.

Economic researcher Mohammed Zakaria pointed out that the US military operation will significantly drive up Nigeria's "sovereign risk premium", leading to higher financing costs and capital flight. In addition, potential visa restrictions will hinder the movement of business personnel, thereby dampening growth in non-oil service sectors.

**Source**: Wall Street News

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