Bombing
Middle East crisis drives brent above $82, threatens higher petrol prices in Nigeria
Nigerians may soon face increased petrol prices as escalating hostilities following Saturday’s joint U.S.-Israel strikes on Iran roil global oil markets, pushing Brent Crude—Nigeria’s pricing benchmark—above $82 per barrel on Monday.
Brent surged by approximately 10 percent during intraday trading amid renewed attacks on vessels near the Strait of Hormuz and threats by Iran to restrict access to the strategic corridor, which handles roughly one-fifth of global oil and gas shipments. Although prices later pared some gains, market volatility has intensified concerns over Nigeria’s fiscal stability and domestic fuel costs.
The price rally comes at a critical period for Africa’s largest oil producer, which is working to ramp up output after years of underperformance linked to oil theft, pipeline vandalism, and underinvestment.
The Nigerian Upstream Petroleum Regulatory Commission has reiterated the Federal Government’s target of raising crude production to about 2 million barrels per day, including condensates, to boost foreign exchange earnings and support the naira.
Analysts noted that sustained higher crude prices could bolster Nigeria’s external reserves and ease borrowing pressures, provided output targets are met.
However, they warned that gains may be partially offset by the country’s continued reliance on imported refined petroleum products.
Despite the phased resumption of operations at the Port Harcourt Refining Company and expected supply from the Dangote Petroleum Refinery, Nigeria still depends significantly on fuel imports.
A prolonged surge in global oil prices would raise the landing cost of petrol and diesel, potentially translating into higher pump prices and renewed inflationary pressures.
At the corporate level, the Nigerian National Petroleum Company Limited could benefit from improved export margins, particularly for Nigerian grades such as Bonny Light and Qua Iboe, which typically command premiums in tight markets. Nonetheless, industry watchers say Nigeria’s ability to fully capitalise on the rally depends on sustained improvements in pipeline security and operational efficiency in the Niger Delta, where production has frequently fallen below OPEC quotas.
While easing tensions in the Strait of Hormuz could see prices retreat, a prolonged Iran-U.S. confrontation may leave Nigeria grappling with the familiar paradox of higher export earnings alongside rising domestic fuel costs.
Following the Middle East crisis, some analysts see crude benchmarks potentially rising to $100 per barrel territory.
The situation is rippling through the region’s vast energy complex. Tanker traffic through the key Strait of Hormuz has slowed to a virtual halt. Saudi Arabia has shut down a major oil refinery, and Qatar has halted liquefied natural gas production.
On Monday, Brent crude gained about nine percent, climbing towards its highest level in 14 months. North American benchmark West Texas Intermediate added about eight percent.
“The ultimate energy price trajectory will hinge on the duration and degree of disruption emanating from this conflict. Certainly, if the war is over in a few days, the oil risk premium will likely recede,” Helima Croft, head of global commodity strategy at RBC, wrote in a research note on Sunday.
“On the other hand, the path to $100+/bbl oil runs through sustained navigational disruption and/or attacks on critical energy facilities in the region.”
Meanwhile, TD Cowen analysts say a potential closure of the Strait of Hormuz will be the biggest catalyst for prices.
“We expect oil to eclipse $90/bbl based on an analysis of geopolitical risk premia in the MidEast,” analysts led by Jason Gabelman wrote. “Prices could ultimately settle out in a lower range once the Strait reopens, with a higher risk premium priced in than prior to the conflict.”
Qatar has shut down liquefied natural gas production at the world’s largest export facility after it was targeted in an Iranian drone attack, sending European gas prices surging more than 50 percent and rattling global energy markets.
QatarEnergy’s Ras Laffan plant covers about a fifth of global LNG supply, and the unprecedented halt now threatens energy security worldwide.
European benchmark gas futures jumped the most since the energy crisis in 2022, after QatarEnergy confirmed Monday that output had been suspended.
Tankers had already largely stopped transiting the Strait of Hormuz, a critical artery for global fuel shipments.
“The threat to security of supply is here and now,” said Simone Tagliapietra, an analyst at Bruegel. “The extent of it will depend on the duration of the shutdown, but we are now into a new scenario.”
While Asian countries buy most of the LNG shipped from the Middle East, a disruption will increase competition for alternative supplies—pushing up prices worldwide, including in Europe.
European gas prices are rallying as storage inventories are unusually low, and the region needs to import large volumes of LNG this summer to refill them ahead of next winter.
The Strait of Hormuz is a key waterway for energy, carrying roughly 20 percent of the world’s LNG. The dramatic slowdown of traffic through the strait has created major bottlenecks, potentially causing fuller storage tanks for QatarEnergy. The company has declared force majeure on its contractual obligations to deliver LNG to its customers, according to people with knowledge of the matter. So far there have been no reports of damage at the facility.
The key question for traders is how long the disruption will last. If shipping through the Strait of Hormuz were halted for a month, European gas prices could more than double, according to Goldman Sachs Group Inc.
Even if the U.S. boosts LNG production, it is unlikely to be enough to offset supply from Qatar in the near-term. QatarEnergy is scheduled to start its Golden Pass expansion project in the U.S. in the coming weeks, but the facility will not be at full capacity until next year.
U.S. President Donald Trump said the bombing campaign against Iran could last for weeks. The conflict continues to deepen, with blasts heard across Israel, Saudi Arabia, Qatar, and the United Arab Emirates, as states intercepted Iranian missiles launched in response to U.S.-Israeli strikes.
Israel on Saturday ordered the temporary closure of some gas-producing capacities, including its biggest Leviathan gas field. That prompted major importer Egypt to seek more LNG cargoes.
Gas trade disruptions in the Middle East could also eventually raise spot LNG demand from Turkey, according to BloombergNEF, as it imports pipeline fuel from Iran.
Dutch front-month futures, Europe’s gas benchmark, traded 46 percent higher at €46.77 per megawatt-hour by 2:31 p.m. in Amsterdam—the highest level since February 2025.
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