Global oil benchmark has crossed the $110-per-barrel mark again as escalating tensions in the Middle East threaten global oil shipments and raise concerns over potential supply disruptions. Fresh attacks on vessels and Saudi energy infrastructure, alongside expectations of declining US crude and refined-product inventories, have strengthened upward pressure on international oil prices.
As at the time of writing, 5:40 am (WAT), Brent crude was trading at $110.30 per barrel, up 1.43 per cent, while US-traded West Texas Intermediate (WTI) stood at $99.14 per barrel, gaining 1.35 per cent.
The latest rally follows renewed concerns over the safety of crude shipments through the Strait of Hormuz and surrounding waters. Iran’s Revolutionary Guards Navy said a supertanker caught fire after striking a sea mine south of the Strait of Hormuz on Tuesday. The incident has heightened concerns about maritime security, particularly after shipping intelligence firm Kpler reported at least 18 vessel attacks over a two-week period.
Risks have also spread beyond the Strait of Hormuz, with threats to shipping in the Red Sea and attacks targeting Saudi energy infrastructure adding to market uncertainty. The Houthis have claimed responsibility for attacks on Saudi Aramco facilities, including sites at Yanbu and the Shaybah oilfield. Any disruption to Saudi production or export infrastructure could complicate efforts to maintain reliable supplies to international markets.
Meanwhile, expectations of falling US crude and refined-product inventories have provided additional support for prices. Market participants are monitoring inventory data for evidence of tightening supply, particularly as concerns over Middle Eastern shipments coincide with uncertainty about the availability of Russian diesel in global markets.
The latest advance follows a volatile trading session in which oil prices eased after diplomatic discussions raised hopes of possible progress towards de-escalation. However, uncertainty over the prospects for a negotiated settlement has limited confidence that the supply risks will disappear quickly. Traders are therefore continuing to factor geopolitical uncertainty into crude prices.
For Nigeria, sustained increases in international crude prices could support export earnings, depending on production volumes and realised prices. However, higher crude and refined-product benchmarks could also increase the replacement costs faced by fuel importers and influence pricing decisions by domestic refiners and depot operators.
The impact on Nigeria’s downstream market will depend on the movement of international petrol prices, the naira-dollar exchange rate, local refining output and the cost of replenishing inventories. A rise in Brent crude alone does not guarantee an immediate increase in petrol prices, but a prolonged rally accompanied by higher refined-product prices could intensify pressure on ex-depot prices.
Market participants will continue to watch developments around the Strait of Hormuz, the Red Sea and Saudi energy infrastructure, alongside US inventory data and diplomatic efforts. Further disruption to shipping or production could sustain the current upward pressure, while improved security and a recovery in supply flows could ease prices.