Crude oil prices surged by about 5% on Tuesday as renewed military strikes between the United States and Iran intensified fears of a deeper disruption to crude supplies through the Strait of Hormuz, a critical route for global oil trade.
As at the time of writing 08:28 pm (WAT), Brent crude was trading at $94.95 per barrel, up 4.93%, while WTI stood at $90.35, representing a 5.35% increase. The sharp rise came after the United States launched a fresh barrage of strikes against Iranian targets, raising concerns that the six-month conflict could escalate into a broader confrontation across the Gulf.
The latest escalation follows a weekend exchange in which US forces struck Iran’s Larak Island, located inside the Strait of Hormuz, while Iran retaliated with missile attacks on US military bases in Jordan. Washington has now launched another round of strikes against Islamic Revolutionary Guard Corps targets, with the US Central Command saying the action followed attempted attacks on commercial shipping and American personnel in the region.
The oil market is particularly sensitive to the renewed hostilities because traffic through the Strait of Hormuz remains severely constrained. The waterway handles a significant proportion of global oil shipments, and fears of further attacks on tankers have increased the risk premium embedded in crude prices.
Those concerns intensified after two supertankers carrying Saudi Arabian crude were reportedly struck by unknown projectiles while leaving the Strait on Monday, according to shipping intelligence and tracking firms. The incidents have heightened concerns that the conflict is increasingly spilling over from military targets to commercial energy infrastructure and shipping.
Iran has also warned that it could prevent oil exports from the Persian Gulf if the confrontation escalates. Iranian Parliament Speaker Mohammad Baqer Qalibaf was quoted as saying that if Iran is prevented from exporting oil, no other country would be able to do so. Such a scenario would represent a major threat to global supply and could push crude prices substantially higher if prolonged.
The latest rally also reverses part of the sharp losses recorded in the previous week, when both Brent and WTI fell more than 4% as markets anticipated a possible easing of hostilities. With the United States now conducting fresh strikes and Iran threatening further retaliation, traders are reassessing the possibility of a prolonged disruption to Gulf crude flows.
For Nigeria, the renewed rise in Brent is significant because international crude prices influence government revenue, foreign exchange earnings, crude valuation and the replacement cost of imported petroleum products. Brent at nearly $95 per barrel also raises the cost pressure facing refiners and marketers as they assess crude and refined-product supply in the domestic market.