Nigerian Crude Prices Surges, closing Friday at $77 per barrel
The Brass River and the esteemed Qua Iboe grades of crude oil have been quoted slightly higher at $77.20, as the turmoil between Israel and Iran unsettled the Middle Eastern market.
The Nigerian oil is trading above the Federal Government’s 2025 budget benchmark of $75, providing the FG with additional fiscal leverage.
Concerns that the Israeli-Iranian conflict might destabilize exports from the region, particularly through the vital Strait of Hormuz, propelled Nigerian crude prices upward.
The Israeli state launched an offensive on a gas facility linked to Iran’s vast South Pars field and targeted onshore tank farms, intensifying strikes aimed at Tehran’s nuclear ambitions.
Energy traders braced for further turmoil after Friday’s sharpest decline in three years, while the assault impacted Iran’s domestic grid rather than its export pipelines.
Despite sanctions, Iran remains the third-largest producer within OPEC, and its Yemeni Houthi allies have targeted vessels in the Red Sea; Tehran has cautioned that it could close the Strait of Hormuz but has never actually obstructed the waterway.
Israel’s aerial strike on Saturday resulted in a substantial blast and fire at the onshore Phase 14 gas facility, compelling crews to shut down a production platform at South Pars, as reported by the semi-official Tasnim news agency.
Markets are speculating whether Israel will now broaden its campaign to attack more Iranian energy assets.
Even if OPEC endeavors to fill the void, it is doubtful that the cartel could replace Iran’s nearly 3.4 million barrels per day during an extended disruption.
Riyadh still remembers that after endorsing Donald Trump’s first-term offensive against Tehran, the Houthi rebels targeted the pivotal Abqaiq processing hub in 2019.
OPEC’s spare capacity can be utilized to compensate for the missing Iranian supply, but doing so would be a diplomatically delicate maneuver for Saudi Arabia and the U.A.E. if those barrels come at Tehran’s expense.
Thus far, none of the major plants have been affected during this latest conflict, and that fact alone is providing traders with a slight reprieve.
The International Energy Agency, a Paris-based watchdog established by oil-consuming nations, stated that despite recent increases in OPEC+ production and a slowdown in fuel demand, the world’s oil markets remain adequately supplied.
The organization noted that, if necessary, it is prepared to draw from emergency reserves.
President Trump proclaimed that a peace accord between the two adversarial nations should and will be achieved in a Truth Social post on Sunday.
Trump had previously expressed his dissatisfaction with the escalating cost of oil before the Israeli attacks.
The Strait of Hormuz is likely a source of exaggerated apprehension as well. An action of this magnitude would isolate Iran’s largest client, China, and sever its export route.
