Petrol Price Hike Looms in Nigeria as Tension Escalates in Middle East
- Crude oil prices have risen above $100 amid escalating tensions between the US and Iran
- The Strait of Hormuz, a key global oil route, remains under uncertain access conditions
- The US and Iran exchanged threats of attacking civilian energy infrastructure in the Middle East
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology, and macroeconomic trends in Nigeria.
Rising crude oil prices and escalating tensions between the United States and Iran are increasing the likelihood of further petrol price hikes, amid uncertainty over access to the strategic Strait of Hormuz, Petroleumprice.ng reported.
Source: Getty Images
As of 9:30 a.m. WAT, global oil benchmarks recorded gains, reflecting growing concerns among traders about potential supply disruptions. West Texas Intermediate (WTI) crude traded at $100.4 per barrel, up 2.17 per cent, while Brent crude rose to $113.7 per barrel, gaining 1.30 per cent.
Strait of Hormuz in focus
The Strait of Hormuz remains a critical chokepoint in global energy supply, with about one-fifth of the world’s traded oil passing through it daily.
Analysts warn that any restriction or closure of the waterway could significantly reduce supply, driving up global oil prices and affecting fuel markets, including petrol prices in import-dependent economies.
Tensions escalate after ultimatum
The latest developments follow a 48-hour ultimatum issued by Donald Trump, who warned of possible strikes on Iranian energy infrastructure if access to the waterway is not fully restored.
The warning has raised fears of a broader escalation that could target not only military installations but also critical economic infrastructure.
In response, Iranian authorities said the strait remains under controlled access. Army spokesman Ebrahim Zolfaghari stated that transit continues but under conditions aligned with national security priorities.
He, however, warned that any attack on Iran’s infrastructure could trigger retaliatory actions, including a potential full closure of the strait and strikes on regional energy assets.
Meanwhile, the US president has backed out of the threat to attack civilian infrastructure in Iran, noting that the planned attack has been postponed after a dialogue with Iranian authorities.
Impact on fuel markets
Market observers say the uncertainty is already affecting downstream supply chains, with private fuel depot operators expected to delay sales or adjust prices upward in anticipation of higher crude costs.
This could translate to increased petrol prices for consumers if the situation persists or worsens.
The International Energy Agency has indicated readiness to coordinate emergency oil releases if needed, but stressed that restoring normal operations through the strait remains the most effective way to stabilise the market.
With both sides maintaining firm positions and the deadline drawing closer, analysts expect continued volatility in global oil prices.
For fuel-dependent countries, the combination of rising crude costs and supply risks suggests sustained upward pressure on petrol prices in the near term.
Source: Getty Images
Dangote Refinery explains why fuel prices may remain high
Legit.ng earlier reported that the managing director and chief executive officer of Dangote Petroleum Refinery, David Bird, said petrol prices may not decline even as the refinery operates at full capacity, citing volatility in global oil markets and rising supply chain costs.
Bird explained that the refinery operates within the international commodities market, which directly influences the cost of crude oil and refined products.
According to him, the refinery purchases crude oil at global benchmark prices, including crude sourced locally under the crude-for-naira programme.
Source: Legit.ng
