Global oil prices have risen for a second consecutive session due to ongoing concerns over supply disruptions in the Middle East. The stalled negotiations and renewed geopolitical tensions have heightened fears of prolonged disruptions to crude oil exports and shipping routes across the region. This has raised concerns about the recovery of global oil supplies despite expectations of a ceasefire.
Brent crude futures rose by $1.49, or 1.4 per cent, to $106.77 per barrel by 0326 GMT, while US West Texas Intermediate (WTI) crude gained $1.34, or 1.5 per cent, to $93.94 per barrel. Both benchmarks had also closed the previous session nearly $1 higher. The sustained increase in crude prices underscores the market’s sensitivity to developments in the Middle East.
Oil trading is currently between approximately $104 and $108 per barrel amid persistent supply concerns and geopolitical uncertainty. For Nigeria and other African economies, the prolonged disruption poses significant economic risks. Higher global crude and refined petroleum product prices feed into domestic energy costs, transportation expenses, and inflation.
In Nigeria, rising international oil prices have coincided with increases in the prices of petrol, diesel, and aviation fuel. This has intensified pressure on households, businesses, and the aviation industry. Petrol prices in parts of Nigeria have climbed to nearly N1,500 per litre from between ₦1,200 and N1,300.
The rising cost of fuel is expected to exert further pressure on transportation and food prices. This will worsen the cost-of-living challenges facing a significant proportion of Nigerian households. Although the government has rolled out compressed natural gas (CNG) buses and other interventions aimed at reducing transportation costs, the sustained increase in fuel prices continues to pose challenges for businesses and consumers.
According to Tim Waterer, chief market analyst at KCM Trade, the increase in crude exports from the Gulf has yet to translate into a full recovery in supply efficiency. Producers continue to rely on alternative shipping arrangements. Preliminary figures from data provider Kpler showed that crude exports from major Middle Eastern producers climbed to 12.8 million barrels per day in September.
US and Iranian officials have held separate discussions with mediators in renewed efforts to end the seven-month conflict. Further negotiations are expected to focus on an amended version of a seven-day proposal presented by Iran. However, uncertainty over the outcome of the diplomatic efforts continues to sustain concerns about global energy supplies and inflation.
Key points
- Oil prices rose due to concerns over supply disruptions in the Middle East.
- The prolonged disruption poses significant economic risks for Nigeria and other African economies.
- Rising fuel prices are expected to exert further pressure on transportation and food prices in Nigeria.
