Nigerian crude climbed to its highest level of 2025, closing Friday at $77 a barrel.
Brass River and the marquee Qua Iboe grade were quoted slightly higher at $77.20 as unrest between Israel and Iran rattled the Middle East market.
The Nigerian oil contract is trading above the Federal Government’s 2025 budget target of $75, providing the FG with some spending ammunition.
Fears that the Israeli-Iranian conflict might destabilize exports from the region, particularly through the crucial Strait of Hormuz, drove up Nigerian crude prices.
The Jewish State attacked a gas plant connected to Iran’s giant South Pars field and targeted onshore tank farms, escalating strikes aimed at Tehran’s nuclear ambitions.
Energy traders braced for further chaos after Friday’s steepest drop in three years, while the offensive impacted Iran’s domestic grid instead of its export pipelines.
Impact on OPEC’s output
Sanctions aside, Iran remains third in OPEC output, and its Yemeni Houthi allies have attacked vessels in the Red Sea; Tehran has warned it could close the Strait of Hormuz but has never actually blocked the waterway.
Israel’s airstrike on Saturday triggered a significant blast and fire at the onshore Phase 14 gas plant, forcing crews to shut down a production platform at South Pars, as reported by the semi-official Tasnim news agency
Markets wonder whether Israel would now expand its campaign to target more Iranian energy assets. Even if OPEC attempted to fill the gap, it is uncertain that the cartel could replace Iran’s nearly 3.4 million barrels per day during a prolonged outage.
Riyadh still recalls that after supporting Donald Trump’s first-term offensive against Tehran, the Houthi rebels struck the crucial Abqaiq processing hub in 2019.
OPEC’s spare capacity can be tapped to cover missing Iranian supply, but doing so would be a politically awkward move for Saudi Arabia and the U.A.E. if those barrels come at Tehran’s expense.
So far, none of the giants’ plants have been affected during this latest round of conflict, and that fact alone is providing traders a bit of breathing room. The International Energy Agency, a Paris-based watchdog established by oil-consuming countries, stated that despite recent increases in OPEC+ production and a slowdown in fuel demand, the world’s oil markets are well-supplied.
The organization noted that, if necessary, it is prepared to draw from emergency supplies.
Donald Trump calls for peace agreement
President Trump stated that a peace agreement between the two warring nations should and will be reached in a Truth Social post on Sunday. Trump had expressed his displeasure with the rising cost of oil before the attacks by Israel.
The Strait of Hormuz is probably a source of excessive fear as well. An action of this magnitude would isolate Iran’s largest client, China, and cut off its export route.
