Crude hits $107, fresh petrol price hike looms

Global crude oil prices surged to $107 per barrel on Thursday, raising fresh concerns that petrol prices in Nigeria could rise further.

The latest rally came as the ongoing US-Iran conflict continued to disrupt crude shipments through the Strait of Hormuz, one of the world’s most important oil transit routes.

Brent crude, the international benchmark, rose more than five per cent in early trading to cross the $107 mark, after moving above $100 earlier in the week. West Texas Intermediate also climbed above $100 per barrel.

The sharp increase in crude prices is putting additional pressure on Nigeria’s downstream petroleum market, where petrol prices have already risen from about N830 per litre before the Middle East crisis to N1,310 or more in some locations.

Before the crisis began on February 28, Brent crude was trading below $69 per barrel. The subsequent disruption to global oil supplies has triggered a sharp increase in international crude prices, with the Dangote Petroleum Refinery and fuel importers adjusting their prices in response to changing market conditions.

Oilprice.com reported that the latest surge was largely driven by a steep decline in oil flows through the Strait of Hormuz.

Oil shipments through the strategic waterway, which had recovered to between six million and nine million barrels per day in previous weeks, have reportedly fallen to below two million barrels per day.

Shipping trackers also indicated that no very large crude carriers had exited the strait since early September, highlighting the extent of the disruption to tanker movements.

The situation has been worsened by reported attacks on tankers and commercial vessels in the Persian Gulf and surrounding waters.

Iran has claimed attacks on several ships, while the United States has confirmed the destruction of some Iranian oil tankers. Neither side has indicated an immediate ceasefire, fuelling concerns that the disruption could persist.

Market analysts said the lack of a clear diplomatic solution had heightened fears of prolonged supply shortages, forcing traders to factor greater risks into crude prices.

For Nigerian consumers, a sustained rise in global crude prices could translate into further pressure on petrol prices as refiners and importers adjust their costs.

With Brent now above $107 per barrel and crude flows through the Strait of Hormuz significantly reduced, the possibility of another petrol price increase in Nigeria has become a growing concern.