Global crude oil prices rose by more than 2 per cent on Thursday as renewed attacks in the Middle East heightened concerns over disruptions to oil production and shipments, keeping supply risks firmly in focus.
As at the time of writing 6:30 am (WAT), Brent crude, the international benchmark, climbed to $111.20 per barrel, up 2.15 per cent, while US West Texas Intermediate (WTI) traded at $99.02 per barrel, gaining 1.92 per cent.
The rally followed renewed Houthi attacks on Saudi Arabia, including reported strikes targeting a Saudi oilfield and civilian infrastructure. The developments have intensified concerns about the security of energy facilities and crude shipments across the region. Reuters reported that the latest attacks, alongside maritime incidents in the Persian Gulf, drove prices higher on Thursday.
Market concerns have also centred on the Strait of Hormuz, a critical shipping route through which a substantial share of the world's oil supply normally passes. Continued threats to vessels and regional export infrastructure could disrupt crude movements, increase shipping costs and tighten the availability of supplies to international buyers.
The latest gains come amid limited signs of progress towards easing the conflict involving Iran and the United States. On Wednesday, oil prices rose after Iranian officials expressed little optimism about diplomatic progress, reinforcing concerns that geopolitical risks could persist.
Falling US crude inventories have provided additional support. Market sources citing American Petroleum Institute data reported that US crude stocks declined by 4.9 million barrels in the week ended October 16, alongside reductions in gasoline and distillate inventories. The drawdown strengthened expectations of tighter supply, although traders were also awaiting official inventory figures from the US Energy Information Administration.
For Nigeria, sustained strength in Brent crude could improve export earnings and government revenue if domestic production volumes remain stable. However, the benefits will depend on actual production, export performance and the cost of operating within an increasingly volatile international market.
Higher crude prices could also increase pressure on the domestic downstream market if refined-product prices rise alongside international benchmarks. Refiners and depot operators will be watching replacement costs, petrol and diesel benchmarks, freight rates and foreign exchange movements when assessing their selling prices.
The effect on pump prices will not be automatic. Domestic petrol prices will also depend on local refinery supply, import costs, the naira-dollar exchange rate and competition among suppliers.
Market participants will continue to monitor developments around the Strait of Hormuz, attacks on Gulf energy infrastructure, diplomatic efforts involving Iran and the United States, and fresh US inventory data for indications of whether the rally can be sustained.