Nigerians may face higher prices for petrol, diesel and other petroleum products in the coming weeks as escalating tensions between the United States and Iran push international crude oil prices upwards.
The development comes amid growing expectations that Washington could resume military strikes against Iran, raising fears of further disruptions to global oil supplies.
Brent crude, the international oil benchmark, rose by 2.6 per cent to $116.13 per barrel on Friday, its highest level since April 30, according to Reuters. US West Texas Intermediate crude also gained about three per cent to trade at $102.56 per barrel.
The increase put Brent futures on course for a weekly gain of nearly six per cent, marking the contract’s third consecutive week of advances, while US crude was set for a weekly gain of about one per cent.
The rising prices could have implications for Nigeria’s domestic fuel market, where the cost of petroleum products is influenced by international crude prices, exchange-rate movements, refining costs, transportation and other market factors.
The latest surge in oil prices followed renewed concerns about a possible escalation of the conflict involving Washington and Tehran, as well as attacks on Saudi Arabian targets by Iran-allied Houthi militants.
Iran’s army chief said the country’s military was fully prepared for what he described as “asymmetric warfare” after strengthening its capabilities, according to Iranian state media agency Tasnim.
US President Donald Trump said on Wednesday that Washington was not negotiating with Tehran and that something would happen “fairly soon”, according to reports.
His remarks came amid reports that US and Israeli officials had discussed plans for possible fresh strikes against Iran following the American midterm elections.
Meanwhile, attacks attributed to Iran-backed Houthi militants have heightened security concerns around Saudi Arabia, a major oil producer and a key player in the global energy market.
The US State Department reportedly ordered non-essential personnel to leave Saudi Arabia amid the security situation.
Saudi state media reported that a drone attack targeting the Shaybah oil field in the kingdom’s Eastern Region on Wednesday left two people dead and two others injured.
Another attack on King Fahd International Airport in Dammam reportedly killed at least two people and injured eight others.
Reuters also reported that Saudi Aramco, the state-owned oil giant, had instructed staff to evacuate its headquarters in Dhahran and work remotely following a series of attacks attributed to Iran-backed Houthi rebels.
The attacks have raised concerns about the security of energy infrastructure and the potential for further disruptions to oil production and distribution in the Middle East.
For Nigeria, sustained increases in international crude oil prices could translate into higher domestic fuel costs, depending on prevailing market conditions.
Although higher crude prices can increase government revenue from oil exports, they may also raise the cost of imported petroleum products and affect domestic fuel prices, with possible consequences for transportation, food prices and the cost of doing business.
Nigeria’s exposure to developments in the international oil market means that any prolonged escalation in the US-Iran tensions could have significant implications for the country’s energy market and wider economy.
