Global oil prices dipped slightly on Wednesday, with Brent crude falling 0.82 per cent to $84.24 per barrel from $84.94 recorded on Tuesday, as investors took profits following the previous day’s sharp rally.
Despite the decline, prices remained significantly higher than Sunday’s $76.01 per barrel, amid continued concerns that the escalating conflict between the United States and Iran could disrupt global crude oil supplies.
The latest market movement followed fresh military strikes by the United States on Iranian targets. In response, Iran’s Revolutionary Guards warned that the Strait of Hormuz would remain closed until what it described as US aggression ended, while also threatening to disrupt other regional oil and gas export routes.
The warning came after coordinated drone, air and naval operations carried out by the US Central Command (CENTCOM). Earlier, US President Donald Trump had threatened restrictions on Iranian ports while allowing vessels from other countries to continue operating under proposed cargo charges, further raising concerns over global energy supply and trade.
Although prices eased on Wednesday, Brent crude remains well above the levels recorded a week earlier, when it traded around $72 per barrel before rising to $76 on Sunday and climbing to nearly $85 on Tuesday as geopolitical tensions intensified.
Commenting on the development, Olufemi Idowu, Partner at Kreston Pedabo, said the renewed conflict has increased geopolitical risks in the oil market, with investors closely watching developments around the Strait of Hormuz.
He, however, said he does not expect a significant increase in Nigeria’s petrol pump prices, noting that current crude oil prices remain below the levels recorded during previous periods of conflict.
For Nigeria, the higher oil prices come as crude oil production continues to improve. According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the country’s average daily crude oil and condensate production rose by 2.3 per cent to 1.74 million barrels per day in June, up from 1.70 million barrels per day in May, raising expectations of increased export earnings, stronger foreign exchange inflows and higher government revenue if prices remain elevated.
