Crude oil prices plunged by nearly $5 per barrel on Monday, driven by escalating tensions in the Middle East. Following Israel’s targeted airstrikes on Iran, one of the world’s top oil producers, global oil markets saw an immediate reaction.
The Israeli strikes, described by officials as “precise and targeted,” aimed at Iran’s air defence systems as well as missile and drone production facilities, according to sources quoted by the BBC. Despite these attacks, initial expectations of a price surge were unmet as oil prices fell sharply.
West Texas Intermediate (WTI) slid from $71.78 on Friday to $68.01 early Sunday before stabilising slightly. Similarly, Brent crude dropped from $76.05 to just below $72, later recovering to around $73. These declines contrast with the spike seen earlier in October after Iran’s missile response to the death of Hamas leader Ismail Haniyeh in Tehran.
Economic analysts caution that any sustained price rise could have mixed impacts for Nigeria, where higher crude oil prices can fuel inflation, pushing up the cost of refined products like PMS and diesel. Economist Paul Alaje noted, “The government will need to determine how to address any increase in petroleum product prices if this trend continues, as inflation is already challenging.”
Meanwhile, PetroChina, China’s largest oil company, announced plans to close its largest refinery by 2025 due to declining refining margins amid slowing demand. With demand for road fuels weaker than anticipated this year, several Asian and European refineries are also considering shutdowns, driven by a shift towards electric vehicles and alternative energy sources.