Oil markets are once again on edge, and this time the tremors are louder, sharper, and far more consequential. Prices surged in early Asian trading as fresh attacks on critical energy infrastructure across the Middle East rattled supply expectations, pushing crude benchmarks higher and reinforcing fears of a deeper global energy shock.
As at the time of writing (6:10am WAT), Brent crude was trading at $111.7 per barrel, up 4.01%, while West Texas Intermediate (WTI) stood at $96.85, gaining 0.55%. Murban crude held steady at $116.8, with natural gas also rising by 2.94% to $3.155. The rally reflects growing anxiety over supply disruptions rather than demand strength, a pattern that typically signals prolonged volatility.
The immediate trigger for the spike was Iran’s expanded strikes on key Gulf energy assets, a retaliatory move following earlier attacks on its South Pars gas field. Qatar confirmed significant damage around the Ras Laffan industrial complex the world’s largest LNG hub while the United Arab Emirates suspended operations at its Habshan gas facility after missile-related incidents. Reports also indicate disruptions around the Bab oil field, further tightening supply nerves.
Across the region, Saudi Arabia, Kuwait, Iraq, and Bahrain have all faced varying degrees of threat, with Saudi air defences intercepting drones and missiles aimed at critical infrastructure. Shipping routes have not been spared either, as vessels near the Strait of Hormuz remain exposed, raising fresh concerns over the security of one of the world’s most strategic oil chokepoints.
Beyond the immediate disruptions lies a more troubling reality: the global oil market is facing a genuine supply squeeze. Estimates suggest that between 7 million and 10 million barrels per day have been knocked offline due to production cuts and export constraints across the Middle East. This sharp decline has effectively erased earlier projections of a supply surplus for 2026.
Analysts are now warning that the market is entering unfamiliar territory. What once seemed far-fetched oil at $150 or even $200 per barrel is increasingly being discussed as a plausible scenario if the conflict drags on. With limited spare capacity and storage constraints, the system has little buffer left to absorb further shocks.
Even if tensions ease, recovery may not be immediate. Restarting shut-in wells and stabilising export flows could take months, meaning prices may remain elevated well beyond the end of hostilities. Temporary relief from alternative supplies, including Russian barrels, is unlikely to fully offset the deficit.
For oil-dependent economies like Nigeria, the implications are mixed. Higher crude prices offer short-term revenue gains for the government, but they also translate into rising petrol costs, increased inflationary pressure, and further strain on households already grappling with elevated living expenses. In this environment, the global oil rally may feel less like a windfall and more like a double-edged sword.