Oil prices jumped by more than a dollar in early trading today amid growing concerns that heightened tensions in the Middle East could impact crude production. The surge follows Iran’s largest military strike on Israel, stoking fears of disruptions in global supply.
Brent futures increased by $1, or 1.36%, reaching $74.56 per barrel, while U.S. West Texas Intermediate (WTI) crude climbed $1.07, or 1.53%, to $70.90 as of 03:30 GMT. Both benchmarks saw gains of over 5% during Tuesday’s trading.
Earlier in the week, oil prices rose by roughly 3% after Iran launched ballistic missiles at Israel, in response to Israeli military actions against Hezbollah, an Iranian ally based in Lebanon. Brent futures rose by $1.86, or 2.6%, closing at $73.56 per barrel, while U.S. WTI crude increased by $1.66, or 2.4%, to settle at $69.83. During the day, both benchmarks spiked by more than 5%.
The escalating conflict has caused alarms across Israel, with explosions heard in Jerusalem and the Jordan River valley, prompting civilians to seek refuge in bomb shelters.
Iran’s government announced that the strikes were in retaliation for Israeli attacks on Gaza and Lebanon, as well as the recent assassinations of Hamas, Hezbollah, and Islamic Revolutionary Guard Corps (IRGC) leaders. Iran also warned Israel against any form of retaliation.
As an OPEC member and a significant player in global oil production, Iran’s involvement in the conflict raises concerns about potential supply disruptions. In August, the country’s output reached a six-year high of 3.7 million barrels per day, accounting for around 4% of global production.
OPEC and its allies, known as OPEC+, are scheduled to meet later on Wednesday to review the market. However, no immediate policy changes are expected. Starting in December, the group plans to raise output by 180,000 barrels per day each month.
South Korean President Yoon Suk-yeol has expressed concern over the country’s energy supply amid the Middle East crisis, urging swift but cautious measures to mitigate potential impacts on the nation’s energy security.
For Nigeria, the rising oil prices signal both positive and negative outcomes. While increased oil revenue may boost government finances and foreign reserves, higher crude prices could drive up petrol prices, a challenge for citizens already grappling with record-high fuel costs, which have surpassed N1,000 per litre in major cities.
Credit: Nairametrics (Text Excluding Healine)
