Global oil prices surged by nearly 14 per cent on Tuesday, with Brent crude climbing to $84.37 per barrel, as escalating tensions between the United States and Iran heightened fears of prolonged disruptions to global crude supplies.
The international benchmark rose sharply from $76.01 per barrel recorded on Sunday, extending a rally that began earlier in the week amid renewed military hostilities between Washington and Tehran and growing concerns over the security of oil exports from the Middle East.
The latest price spike followed a fresh exchange of attacks between both countries over the weekend and into Tuesday. Adding to market jitters, Iran announced the closure of the Strait of Hormuz—one of the world’s most critical oil transit routes through which nearly 20 per cent of global crude supplies are transported.
Investor anxiety was further fuelled by uncertainty surrounding US trade and sanctions policies. In a post on his Truth Social platform, US President Donald Trump announced that he had abandoned plans for a proposed 20 per cent reimbursement fee in favour of new trade and investment agreements with Gulf states.
Trump said the Gulf nations would instead commit to “massive” investments in the United States, describing the proposed arrangements as “extraordinarily good” for both parties and their future economic relations.
The development came after the US president had earlier threatened to impose restrictions on Iranian ports while allowing vessels from other countries to continue operations under a proposed cargo levy—a move that intensified concerns over global oil trade and supply chains.
The latest rally marks a sharp turnaround from the downward trend seen in recent weeks. Brent crude had slipped to around $72 per barrel amid easing geopolitical tensions, increased output from OPEC+ producers and concerns over weakening global demand before recovering to $76 on Sunday and surging to nearly $85.
Commenting on the development, Olufemi Idowu, Partner at Kreston Pedabo, said the renewed conflict has restored a significant geopolitical risk premium to crude prices.
“I do not expect any major upward review in the local pump price of petrol because oil prices are still significantly lower than the level we had during the war,” he said.
For Nigeria, the surge in crude prices comes at a time when the country is recording its strongest oil production levels in more than six years, raising hopes of increased export earnings, improved foreign exchange inflows and stronger government revenues if the rally is sustained.
According to data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria’s average daily crude oil and condensate production increased by 2.3 per cent to 1.74 million barrels per day (mbpd) in June, up from 1.70 million barrels per day in May. This marks the country’s highest production level in over six years, strengthening prospects for greater revenue amid rising global oil prices.
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