Brent Crude Hits $82 as Middle East Tensions Disrupt Oil Supply
Global oil prices spiked yesterday as Brent crude hit $82 per barrel and WTI sold at $70.91, following attacks on ships near the Strait of Hormuz. Analysts warned that if tensions persist, prices could soar above $100.
The crisis deepened after Saudi Arabia shut its largest refinery, Ras Tanura, following a drone strike. “Debris from the intercepted drones caused a limited fire,” a defence ministry spokesperson told Al Arabiya, adding that no injuries were reported.
Chevron halted operations at Israel’s Leviathan gas field, while Energean suspended production at smaller offshore fields, curbing gas exports to Egypt. Shipping through the Strait of Hormuz, which carries a fifth of global oil, slowed sharply.
The Sea Empowerment and Research Center (SEREC) cautioned that freight rates could rise by up to 40 percent, while war-risk insurance premiums may quadruple.
“The US–Iran confrontation is more than a geopolitical conflict. It is a structural stress test for global trade,” said Eugene Nweke, SEREC’s Head of Research.
SEREC’s modelling projected marine insurance premiums could jump 200–400 percent, forcing vessels to reroute around the Cape of Good Hope.
Such diversions would add days and hundreds of thousands of dollars to shipping costs, with ripple effects across global economies.
For Nigeria, the crisis presents both risks and opportunities. Elevated oil prices could generate an additional $18–22 billion in annual revenue, boosting GDP growth by up to 1.2 percentage points. But SEREC warned inflation could rise by 3–5 points if fiscal discipline falters.
The Dangote Refinery in Lagos was identified as a strategic buffer. “If strategically managed, the refinery serves as a national economic stabiliser during external shocks,” SEREC said, noting its capacity to reduce Nigeria’s dependence on imports and ease pressure on the naira.
SEREC urged African governments to channel oil windfalls into stabilisation funds, expand strategic reserves, and strengthen maritime security.
“Nigeria’s resilience will depend not merely on crude revenue gains, but on disciplined fiscal management, domestic refining optimisation, trade diversification, and maritime competitiveness,” Nweke concluded.