Global crude oil prices surged to their highest level in a month on Tuesday, following renewed hostilities between the United States and Iran, raising fresh concerns over disruptions to global energy supplies through the Strait of Hormuz.
Brent crude rose by 4.19 percent to $86.79 per barrel, its highest level since June 12, while the US West Texas Intermediate (WTI) gained 3.16 percent to trade at $80.61 per barrel.
The latest rally comes after the United States reimposed a naval blockade on Iran, triggering renewed military exchanges between Washington and Tehran and heightening fears over the security of one of the world’s busiest oil shipping routes.
On July 12, Iran announced the closure of the Strait of Hormuz after its forces fired a naval cruise missile at a vessel it accused of navigating through an unauthorised route.
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The development marks a sharp reversal from last month when crude prices fell to about $82 per barrel after the US, Israel and Iran reached a ceasefire agreement that ended hostilities across the Middle East, including Lebanon, and reopened the strategic waterway.
The earlier decline in crude prices prompted the Federal Competition and Consumer Protection Commission (FCCPC) to accuse petroleum marketers of failing to pass the benefits of lower global oil prices to Nigerian consumers.
According to the commission, reductions in pump prices at the time did not reflect the significant drop in international crude prices.
In response, Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said the Federal Government was engaging oil marketers and regulators to ensure that fluctuations in global crude prices are more transparently reflected in domestic fuel prices.
As part of those efforts, the Federal Government on July 10 convened a meeting with key stakeholders in the oil and gas sector, including refinery operators and petroleum marketers, to discuss a fair and transparent pricing framework for petroleum products across the country.
The renewed rise in crude prices is expected to put fresh pressure on fuel pricing and inflation in Nigeria if the geopolitical tensions persist.
