Oil Price Surges 5% To $87 As Trump-Iran Tensions Escalate

Global crude oil prices have climbed by about 5 per cent to $87 per barrel, rising from the previous level of $83, amid renewed tensions between former United States President Donald Trump and Iran over the reopening of the strategic Strait of Hormuz.

According to Ireporter Online, the development has raised concerns over possible further increases in energy costs, particularly as winter approaches and uncertainty continues to affect shipping activities through the key waterway.

Francisco Blanch, Head of Commodities and Derivatives Research at Bank of America, warned that oil prices could continue moving higher if the dispute is not resolved and normal shipping operations are not restored.

Blanch, speaking on CNBC, noted that only a small number of cargo vessels are currently passing through the Strait of Hormuz, compared with about 140 ships that previously used the route each day.

The rise in global crude prices has also boosted Nigeria’s potential oil revenue, with Brent crude, the international benchmark used in determining the value of Nigeria’s Bonny Light and the OPEC Basket, now trading around $87 per barrel.

Nigeria’s 2026 budget, valued at ₦68.32 trillion, was based on an oil benchmark of $64.85 per barrel, projected crude production of 1.84 million barrels per day and an exchange rate assumption of ₦1,400 to the dollar.

At the current $87 crude price, the country is therefore earning about $22.15 above its budget benchmark on each barrel produced, assuming other factors remain unchanged.

Despite the increase in international oil prices, however, Nigeria’s domestic petroleum market has not recorded a uniform corresponding increase.

Market data showed mixed movements in the prices of Premium Motor Spirit, popularly known as petrol, and Automotive Gas Oil, or diesel, across major petroleum depots.

In Lagos, some operators reduced their petrol depot prices slightly. African Terminal lowered its rate by ₦4 to ₦1,165 per litre, while Aiteo reduced its price to the same level from ₦1,168.

NIPCO also cut its depot price by ₦2 to ₦1,166 per litre, while Dangote and Pinnacle maintained their prices at ₦1,166 per litre.

However, some other facilities continued to sell at significantly higher rates. GulfTreasure and Duport reportedly offered petrol at ₦1,550 per litre, while Rain Oil recorded the highest listed price at ₦1,580 per litre.

The varying depot prices highlight continued volatility in Nigeria’s downstream petroleum market, with rates influenced by factors including location, product availability and individual pricing strategies.

The latest developments could put additional pressure on petrol prices in parts of the country if international crude prices remain elevated and higher costs filter through the domestic supply chain.