Oil price rally threatens fresh petrol increase

A further increase in petrol prices may be imminent in Nigeria following a sharp rise in international crude oil prices, with Brent crude climbing to $107 per barrel on Thursday from about $100 the previous day.

The development has intensified pressure on domestic fuel prices, which have risen from around N830 per litre before the Middle East crisis to N1,310 or more in some parts of the country.

Before the crisis erupted on February 28, crude oil was trading below $69 per barrel. But disruptions to global oil supplies have since pushed prices higher, forcing the Dangote Petroleum Refinery and fuel importers to review their pricing.

Oilprice.com reported that Brent crude gained more than five per cent in early trading on Thursday as the continuing military confrontation between the United States and Iran disrupted oil movements through the Strait of Hormuz.

West Texas Intermediate also rose above $100 per barrel amid growing concerns that the conflict could further restrict global crude supplies.

The latest rally was largely linked to a steep decline in oil flows through the Strait of Hormuz, a major route for global energy shipments.

According to the report, daily oil outflows through the strait, which had recovered to between six million and nine million barrels in previous weeks, had dropped below two million barrels.

Shipping trackers also indicated that no very large crude carriers had exited the strait since early September, pointing to a significant reduction in tanker traffic.

The situation has been worsened by attacks on tankers and commercial vessels in the Persian Gulf and surrounding waters.

Iran claimed responsibility for strikes on several ships, while the United States confirmed that some Iranian oil tankers had been destroyed. Neither side has indicated that a ceasefire is imminent, raising concerns that the confrontation could persist for weeks or longer.

Market analysts said the uncertainty had compelled traders to reassess the risks to global oil supplies.

Physical crude benchmarks had already crossed the $100 mark in recent sessions, while futures prices followed as inventories tightened and alternative export routes became increasingly vulnerable to attacks.

For months, improved tanker traffic through the Strait of Hormuz had helped ease concerns over supply disruptions and restrained crude prices. That trend has now reversed.

With oil flows significantly reduced and no clear diplomatic solution in sight, the market is increasingly factoring in the possibility of a prolonged disruption to one of the world’s most critical energy corridors.

In Nigeria, sustained increases in crude prices could translate into another round of petrol price adjustments as domestic refiners and importers respond to higher global crude and supply-related costs.