Global oil prices climbed by nearly 14 per cent on Tuesday, with Brent crude rising to $84.37 per barrel from $76.01 on Sunday, as escalating tensions between the United States and Iran raised concerns over possible disruptions to global crude oil supplies.
The latest rally follows renewed military exchanges between the two countries and Iran’s announcement of the closure of the Strait of Hormuz, a key global shipping route through which about 20 per cent of the world’s crude oil passes.
The increase in oil prices was also driven by uncertainty surrounding US trade and sanctions policies.
In a post on his Truth Social platform, US President Donald Trump said he had abandoned plans for a proposed 20 per cent United States reimbursement fee, opting instead for trade and investment agreements with Gulf states.
According to Trump, the Gulf nations would make substantial investments in the United States under arrangements he described as beneficial to both sides.
Earlier, Trump had threatened to impose restrictions on Iranian ports while allowing vessels from other countries to continue operating under a proposed cargo charge, adding to concerns over global oil trade and supply chains.
The latest price surge reverses the downward trend seen in recent weeks. Brent crude had fallen to around $72 per barrel last week amid easing geopolitical tensions, increased production by OPEC+ members and concerns about slowing global demand before rebounding sharply.
Commenting on the development, Olufemi Idowu, Partner at Kreston Pedabo, said the renewed conflict has restored a significant geopolitical risk premium to global crude prices, with investors closely monitoring developments around the Strait of Hormuz and the potential impact of further sanctions and military action.
Despite the rise in global oil prices, Idowu said he does not expect a major increase in Nigeria’s petrol pump prices because current crude prices remain below the levels recorded during previous periods of conflict.
For Nigeria, the increase in oil prices comes as the country records its strongest oil production in more than six years, raising expectations of higher export earnings, improved foreign exchange inflows and increased government revenue if the current price trend continues.
Data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that Nigeria’s average daily crude oil and condensate production rose by 2.3 per cent to 1.74 million barrels per day (mbpd) in June, up from 1.70 mbpd in May.
