Oil prices tops $100 – first since May as Middle East conflict escalates

Global oil prices have climbed above $100 a barrel for the first time since May, as an escalating conflict in the Middle East rekindled fears of a worldwide energy supply crunch.

Brent crude, the international benchmark, jumped more than 6% on Thursday to trade briefly above $100, capping several days of gains as the United States intensified military strikes against Iran.

The latest surge followed attacks by Yemen’s Houthi militia on Saudi oil tankers in the Red Sea, a route Saudi Arabia has relied on to move crude around the Strait of Hormuz. Several vessels carrying Saudi oil bound for Asia reportedly turned back after the group declared a naval blockade on the kingdom.

West Texas Intermediate, the US benchmark, also rose sharply, while stock markets in New York and Europe fell as investors weighed the inflationary fallout of costlier energy.

Prices had retreated to pre-war levels of about $72 a barrel last month after Washington and Tehran agreed a temporary ceasefire. But the truce has since collapsed. US Secretary of State Marco Rubio said this week that Iran’s leadership was “not ready to make a deal”.

Analysts warn the rally may not be over. Goldman Sachs projects Brent could exceed $120 a barrel by the final quarter of the year if supply disruptions persist, with some strategists suggesting a full regional war could push prices beyond the peaks seen after Russia’s invasion of Ukraine in 2022.

What it means for Nigeria

For Nigeria, Africa’s largest oil producer, triple-digit crude prices cut both ways.

The country’s 2026 budget assumes a crude price of $64.85 per barrel, production of 1.84 million barrels a day and an exchange rate of ₦1,400 to the dollar. With Bonny Light, Nigeria’s premium grade, now trading well above that benchmark, government revenue could receive a significant boost — provided output targets are met and crude theft and pipeline vandalism do not erode gains.

But the windfall carries risks. Nigeria still imports a portion of its refined petroleum products, and higher global crude prices typically feed into landing costs for petrol and diesel. Since the removal of the petrol subsidy in 2023, pump prices have moved with international markets, and marketers have cautioned that prolonged instability in the Middle East could push domestic fuel prices higher in the weeks ahead.

Petrol currently sells for over ₦1,200 a litre in the country, and any further increase would ripple through transport fares and food prices at a time when households are already contending with elevated living costs.

Earlier this week, Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announce the country is on course to achieve its target of producing 3 million barrels of crude oil per day by 2030.