Global oil prices surged sharply on Wednesday after the fragile ceasefire between the United States and Iran collapsed, reigniting fears of prolonged supply disruptions in the Middle East and pushing Brent crude close to the $80 per barrel mark.
As at the time of writing 09:40 pm (WAT), Brent crude traded at $79.14 per barrel, up 6.72%, while West Texas Intermediate (WTI) crude rose 5.93% to $74.62 per barrel, reflecting renewed geopolitical risk across global energy markets.
The sharp rally followed Trump's announcement that the temporary ceasefire with Iran was no longer in force. "The interim ceasefire agreement with Iran is officially over," Trump declared, describing the recently signed memorandum of understanding as "a waste of time."
His remarks immediately intensified market concerns that tensions around the Strait of Hormuz the world's most critical oil shipping route could escalate further, threatening global crude supplies. The remarks came after Iran reportedly attacked three commercial vessels transiting the Strait of Hormuz on Tuesday, triggering fresh military exchanges between Washington and Tehran.
According to reports, one liquefied natural gas (LNG) carrier caught fire after being struck on its port side, while a Saudi-flagged supertanker sustained minor damage off the coast of Oman. In response, the United States launched extensive airstrikes targeting more than 80 military installations across Iran, including strategic facilities on Qeshm Island, Sirik and the key port city of Bandar Abbas.
The escalation also prompted the U.S. administration to revoke a temporary sanctions waiver that had allowed Iran to continue exporting crude oil and petrochemical products. Iranian military authorities subsequently announced the formal closure of the Strait of Hormuz, warning that any commercial vessel attempting to navigate the waterway could face direct military action.
The renewed conflict has sharply increased concerns over global oil supplies, given that roughly one-fifth of the world's seaborne crude passes through the Strait of Hormuz. The threat of prolonged disruptions has forced traders to rapidly price in a new geopolitical risk premium after weeks of relative stability.
Shipping costs across the Gulf have also climbed as tanker owners demand significantly higher war-risk premiums before accepting cargoes. At the same time, refiners across Asia are reportedly scrambling to secure alternative crude supplies from West Africa, the United States and Latin America amid uncertainty over the duration of the crisis.
Despite recent moves by OPEC+ to increase production quotas, analysts say additional output may not be sufficient to offset any prolonged disruption to exports through the Gulf if military tensions continue to escalate. The latest price surge underscores the market's sensitivity to developments in one of the world's most critical energy corridors.
For Nigeria, sustained higher crude prices could provide stronger oil revenues and improve foreign exchange earnings. However, a prolonged rally may also increase the cost of importing refined petroleum products and place renewed pressure on domestic fuel prices, particularly as marketers continue to adjust to the country's fully deregulated downstream market.
With diplomatic efforts showing little sign of progress and military operations intensifying, energy markets are expected to remain highly volatile in the coming days, with traders closely monitoring developments in the Strait of Hormuz for further signals on global crude supply.