By Benson Daniel
Global oil prices surged above $94 a barrel as renewed military confrontation between the United States and Iran intensified concerns over the security of crude shipments through the Strait of Hormuz.
Brent crude, the international benchmark, rose by more than $4 to settle at about $94.55 a barrel, marking its strongest level in several weeks. US West Texas Intermediate crude also advanced sharply, gaining more than 5 per cent to trade around $90.20 a barrel.
The latest rally came after fresh US strikes on Iranian targets, adding to concerns that the conflict could widen and disrupt energy flows from the oil rich Gulf region.
Markets have become increasingly sensitive to developments around the Strait of Hormuz, one of the most important routes for global energy trade. Any prolonged disruption to shipping through the waterway could remove a significant volume of crude from international markets and put further upward pressure on prices.
The latest escalation followed attacks and attempted attacks involving commercial shipping in and around the strategic waterway. Reports that tankers had been hit while travelling through the region added another layer of concern for traders already pricing in a higher geopolitical risk.
The situation has raised fears that shipping companies could become more reluctant to send vessels through the area, while insurers and freight operators could also demand higher premiums to cover the growing security risks.
Iran has also issued warnings over oil exports from the Gulf, increasing concerns that a wider confrontation could affect not only Iranian crude but supplies from other major producers in the region.
The jump in oil prices comes at a time when energy markets were already closely watching developments in the Middle East. Traders have been weighing the possibility of tighter supplies against expectations for global demand, with geopolitical risks now becoming a major driver of price movements.
The impact could extend beyond crude markets if the confrontation persists. Higher oil prices typically feed into transportation, manufacturing and electricity costs, particularly in countries that depend heavily on imported energy.
For oil producing economies such as Nigeria, the price increase could provide additional revenue opportunities if higher international prices are sustained. However, the benefit will depend on domestic production levels, crude output available for export and the country’s fiscal and exchange rate conditions.
Nigeria’s position is further complicated by its growing domestic refining capacity and the need to balance crude exports with supplies to local refineries. A sustained rise in global crude prices could improve export earnings, but it could also increase the cost of petroleum products where international pricing continues to influence the domestic market.
The latest price movement therefore presents both an opportunity and a risk for oil dependent economies. Higher crude prices can strengthen government revenues, but prolonged geopolitical instability can also raise the cost of imported goods and worsen inflationary pressures.
Investors are now watching the next moves by Washington and Tehran closely. Any indication of further military escalation, additional attacks on commercial vessels or restrictions around the Strait of Hormuz could trigger another sharp reaction in the oil market.
Conversely, signs of de escalation could quickly reduce the geopolitical premium that has pushed crude higher in recent sessions.
For now, the market remains firmly focused on supply security, with traders assessing how far the latest US Iran confrontation could spread and whether the world’s most important oil shipping corridor can continue operating normally.
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