By Chibuzor Alli
International crude oil prices have risen to $107 per barrel, increasing the risk of another petrol price increase in Nigeria as disruption to global oil supplies continues.
Brent crude rose from about $100 per barrel on Wednesday to $107 on Thursday, while West Texas Intermediate also climbed above $100.
The latest rally has added pressure to Nigeria’s domestic petrol market, where prices have already risen from about N830 per litre before the Middle East crisis to N1,310 or more in some locations.
Before the crisis began on 28 February, crude oil was trading below $69 per barrel.
The subsequent disruption to global oil supplies has pushed international prices sharply higher, prompting refiners and fuel importers to adjust their pricing.
According to Oilprice.com, Brent crude gained more than five per cent in early trading on Thursday as the continuing US-Iran conflict disrupted oil supplies through the Strait of Hormuz.
The rise has increased concerns about a sustained reduction in global crude availability.
Strait of Hormuz disruption
Oil flows through the Strait of Hormuz have fallen sharply, adding to pressure on the international oil market.
Oilprice.com reported that volumes, which had recovered to between six million and nine million barrels per day in previous weeks, had fallen to below two million barrels per day in recent estimates.
Shipping trackers also reported that no very large crude carriers had exited the strait since early September, marking a significant decline from the higher tanker traffic recorded during a brief period of relative calm.
Attacks on tankers and commercial vessels in the Persian Gulf and surrounding waters have further increased uncertainty over global oil supplies.
Iran has claimed to have struck several ships, while the United States has confirmed the destruction of some Iranian oil tankers.
Officials from both sides have given no indication of an imminent ceasefire, with their statements suggesting that the confrontation could continue for weeks or longer.
Analysts said the lack of a clear path towards de-escalation had forced traders to reassess global supply risks.
Physical crude benchmarks had already moved above $100 in recent sessions, while the futures market followed as inventories tightened and alternative export routes faced increased exposure to attacks.
Oil prices put pressure on petrol costs
For months, reports of recovering tanker traffic through the Strait of Hormuz had helped limit upward pressure on crude prices.
That outlook has now changed, with sharply reduced oil flows and no clear diplomatic resolution in sight.
Global markets are increasingly pricing in the possibility of prolonged disruption to one of the world’s most important energy transit routes.
For Nigeria, a sustained rise in international crude prices could feed into the domestic petrol market as refiners and importers adjust their prices to reflect changes in global crude and related supply costs.
This could increase pressure on petrol prices, which have already climbed significantly since the start of the Middle East crisis.
Leave a comment