Global crude oil prices jumped to $78 per barrel following renewed military tensions between the United States and Iran, reversing recent hopes for lower fuel costs. The surge in Brent crude, which briefly hit $79 during intra-day trading, came after the US military targeted over 80 Iranian-linked sites in response to alleged attacks on ships transiting the Strait of Hormuz. The strategic waterway handles about 20% of the world's fuel supply, and any threat to its operations has immediate implications for global energy markets. Traders reacted by pricing in higher geopolitical risk, even though no actual disruption to oil production has been confirmed.
The rise presents a setback for governments, including Nigeria, that have been pushing to reduce petrol prices amid public pressure. In Nigeria, where pump prices are tied to global crude rates and foreign exchange conditions, the increase could hinder efforts to sustain lower fuel costs. This week, the federal government held talks with Dangote Refinery and other oil marketers to ensure pricing reflects the recent dip in crude prices, which had fallen to $70 per barrel just before the escalation.
Oil and gas analyst Dr. Marcel Okeke said Nigeria's dependence on imported refined petroleum leaves it vulnerable to global shocks. He urged faster progress on local refining, citing the need to fix the Port Harcourt, Warri, and Kaduna refineries. According to Okeke, only a robust domestic refining capacity can shield Nigeria from external volatility. "As long as we keep importing refined products from outside, any day Trump wakes up and comes up with a new day, it changes everything again," he said. He noted petrol prices had been around N800 before the crisis began and warned that reliance on global markets undermines local pricing control.
Dr. Marcel Okeke points out that Nigeria's fuel pricing is being dictated by events beyond its borders, yet the government continues to treat local price controls as a viable solution. The same administration pushing for fixed pump prices knows those prices shift with every geopolitical flare-up in the Middle East. Relying on imports while expecting stable domestic fuel costs ignores the reality of global market dependence. Without functional refineries in Port Harcourt, Warri and Kaduna, Nigeria will keep reacting to crises it cannot control.
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