By Itopa Lawal
Continued Middle East crisis has pushed oil prices on a higher pedestrian, hovering between $90 and $100 per barrel in the global market.
At the close of business last Friday, oil prices climbed above $100 per barrel for the first time since May, this was attributed to palpable concerns over energy supplies and heightened fears of renewed inflationary pressures across major economies.
In Nigeria, there was price war between the major players in the downstream sector oil marketing as Dangote Refinery suspended and later resumed sales of product in Naira when marketers resisted the US Dollar payment currency brought into the business by Dangote. Major stakeholders had also expressed concern over the unstable price of refined petroleum products in the country thus calling for a reduction across board.
Daily Newscraft reports that lifting of PMS was put on hold within this period,
In Abuja prices of PMS hovers around N1,131 and N1,350 per litre depending on the petrol station visited.
Also in Kaduna most petrol station sold for N1,350 a litre. An oil marketing officer who spoke on the ground of anonymity said crisis in the middle East with no clear certainty or direction was responsible for the frequent changes in the domestic fuel prices which he said will remain with the market until peace is restored in Ran’s Strait of Hormuz.
Brent crude, the international benchmark for oil prices, rose more than 6% on Thursday after several days of gains, driven by an intensification of U.S. military operations against Iran and fresh attacks on commercial shipping in the Red Sea.
According to the BBC, the latest rally underscores growing concerns among investors that prolonged geopolitical instability could disrupt oil exports from one of the world’s most strategically important energy-producing regions.
Oil prices accelerated after Yemen’s Houthi militia launched attacks on oil tankers navigating the Red Sea, threatening one of the region’s most important shipping corridors.
The Red Sea has become an increasingly critical export route for Saudi Arabia and other Gulf producers seeking alternatives to the Strait of Hormuz, through which roughly one-fifth of global oil supplies pass. Any disruption to these maritime routes raises the risk of tighter global crude supplies and higher transportation costs.
The latest developments have erased much of the price decline recorded after a temporary ceasefire between the United States and Iran earlier this year.
Oil markets had retreated to pre-conflict levels following a brief pause in hostilities between Washington and Tehran.
However, renewed military activity and the collapse of diplomatic efforts have reversed that trend. U.S. Secretary of State Marco Rubio recently said Iranian leaders were “not ready to make a deal,” signalling that prospects for a negotiated settlement remain uncertain.
The renewed conflict has prompted traders to price in higher geopolitical risk premiums, pushing crude prices back into triple-digit territory.
The surge in oil prices is expected to place fresh upward pressure on inflation in both advanced and emerging economies.
Higher crude prices typically translate into increased costs for petrol, diesel, aviation fuel and industrial energy, raising operating expenses for businesses and transportation companies. These additional costs are often passed on to consumers through higher prices for food, manufactured goods and other essential products.
Natural gas prices have also moved sharply higher over the past month. The benchmark UK gas price has climbed to around 150 pence per therm, up from approximately 98 pence at the end of June, reflecting broader concerns over energy security.