Crude oil prices surged on Thursday toward $84 a barrel, the highest this year, outpacing Nigeria’s 2026 budget benchmark of $64.85 per barrel.
According to Bloomberg, Brent crude, the global oil benchmark, jumped 12% over the first three days of the week, while West Texas Intermediate was near $78.
The development comes amid escalating tensions in the Middle East as the US and Israeli war against Iran disrupted crude flows to key importers.
What the report is saying
Global oil prices keep rising as the combatants push to press on with the conflict. However, China, the top importer, is seeking to conserve fuel.
- The Chinese government told its largest refiners to suspend exports of diesel and gasoline, with curbs reflecting efforts to prioritize domestic needs as the crisis deepens.
- Earlier this week, a major Indian processor told customers it would suspend product exports.
Japanese refiners are also asking their government to release oil from strategic petroleum reserves.
More insights
Higher prices boost Nigerian government revenue, even though the West African economy’s production has been below its OPEC quota.
This, however, has a consequence on local fuel consumption as petrol prices go up.
- The market’s principal concern remains the Strait of Hormuz, with traffic through the waterway — including oil and gas tankers — all but halted.
The effective closure of the conduit has bottled up crude supplies from Iran, as well as other Persian Gulf producers, forcing some to start shutting in output.
Analysts react
Analysts believe that Middle East tensions, if not resolved, could lead to global oil price spikes.
- “If we see even one more successful strike on an oil tanker or infrastructure, or sustained disruption, prices can spike sharply again,” a senior market analyst at brokerage Phillip Nova Pte, Priyanka Sachdeva, said.
There remains “a lot of uncertainty” about the direction of the Middle East conflict and how it will be resolved, Goldman Sachs Group Inc. Chief Executive Officer David Solomon said in a Bloomberg Television interview in Sydney.
What you should know
Escalating geopolitical tensions in the Middle East continue to drive oil prices and are having ripple effects on the broader economy.
In Nigeria, major oil marketers have adjusted prices, including Dangote Refinery, which increased its gantry price by N100, bringing the ex-depot rate to N874 per litre from N774.
Following Dangote Refinery’s announcement of the PMS price hike on Monday, several fuel marketers also followed suit.
The Nigerian National Petroleum Company Limited (NNPCL) increased the pump price of petrol at its retail outlets in Abuja to N960 per litre, up from N875.
Several NNPCL stations in the Federal Capital Territory initiated upward adjustments, with petrol selling at N960 per litre compared to N875 per litre.
