Brent crude has gotten to the $100 per barrel mark for the first time in nearly two months as the escalating U.S.-Iran conflict threatens to further disrupt crude supplies, tanker movements and energy infrastructure across the Middle East.
As at the time of writing 08:50 am (WAT), Brent crude was trading at $99.64 per barrel, up 1.76 per cent, while WTI stood at $94.20, gaining 1.26 per cent, reflecting the growing risk premium attached to Middle East supplies.
The latest price surge followed the destruction of five Iranian crude carriers by US forces, days after three other Iranian oil tankers were struck. The US Central Command said the latest attacks were carried out in response to Iranian missile attacks on a US Navy warship.
The five vessels are M/T Kaviz, M/T Charminar, M/T Horizon 1 and M/T Riesco in the Gulf of Oman, and M/T Derya near Kharg Island were targeted as Washington intensified its military and economic pressure on Tehran. The strikes have raised fresh concerns over the ability of Iranian crude to reach international markets.
Iran subsequently targeted US forces in Jordan, with Jordan’s Armed Forces saying 20 ballistic missiles were fired from Iranian territory. Eighteen were intercepted, while two landed in unpopulated areas, according to the Jordanian military.
The supply risk is widening beyond Iranian crude. Houthi attacks on Saudi Arabia have reportedly forced the Kingdom to halt operations at several energy sites after fires were reported at multiple locations. Saudi authorities said specialised teams were containing the fires and assessing the damage.
For the oil market, the concern is no longer limited to disruption around the Strait of Hormuz. The destruction of tankers used to transport Iranian and Russian crude is also threatening the so-called shadow fleet that has helped maintain flows despite sanctions. Any sustained reduction in those volumes could tighten the physical market and reinforce the bullish pressure on prices.
The development is significant for Nigeria because a sustained rise in international crude prices can increase the cost of imported petroleum products, particularly where domestic supply gaps require imports. Higher freight, insurance and crude acquisition costs could also add pressure to refinery economics and downstream pricing if the geopolitical risk persists.
Oil traders are now watching the conflict for signs of further attacks on commercial shipping and energy infrastructure, while the American Petroleum Institute’s inventory report is expected to provide additional indications of the underlying strength of the physical oil market.