Global oil prices climbed above $100 per barrel on Thursday for the first time in nearly two months after escalating attacks on commercial shipping in the Red Sea heightened fears of prolonged supply disruptions across key global energy routes.
Brent crude, the international benchmark, rose to $100.69 per barrel in mid-morning trading, gaining more than seven per cent after touching an intraday high of $101.01.
According to Oilprice.com, US West Texas Intermediate also recorded sharp gains, while the entire Brent forward curve strengthened as traders factored in growing risks to global crude supplies.
The latest rally followed claims by Yemen’s Houthi rebels that they had struck two Saudi oil tankers in the Bab el-Mandeb Strait after announcing a naval blockade of Saudi oil exports earlier this week.
The attacks reportedly forced several commercial vessels to reroute or delay passage through the strategic waterway, threatening Saudi Arabia’s key export corridor used to bypass disruptions in the Strait of Hormuz.
The fresh escalation has fuelled concerns that the Middle East supply crisis is spreading beyond Hormuz, placing two of the world’s most important oil shipping routes under simultaneous pressure.
Brent has now surged by about 20 per cent in the past two weeks as repeated attacks on commercial shipping, renewed fighting involving Iran and mounting export disruptions erased earlier expectations that geopolitical tensions would ease quickly.
The rally has also been supported by disruptions outside the Gulf. Kazakhstan has reportedly begun cutting oil production after drone attacks shut down tanker loadings at the Caspian Pipeline Consortium terminal on the Black Sea.
Indian state-owned refiners have also suspended Iraqi crude loadings because of shipping risks through the Strait of Hormuz, while Russian fuel exports remain constrained following months of Ukrainian drone strikes on refineries.
The physical oil market is tightening alongside the futures rally, with governments drawing down strategic petroleum reserves to cushion supply shortages.
Commercial crude inventories have reportedly declined sharply, while China has reduced imports by relying on stockpiles accumulated before the Middle East conflict, reducing another key buffer against supply shocks.
Brent’s return to triple digits reverses the optimism that followed the memorandum of understanding between the United States and Iran, which had briefly raised hopes that Middle East crude exports would normalise.
Those expectations have since faded as hostilities expanded from the Strait of Hormuz to the Red Sea, raising fears of wider disruptions to global oil trade.
The latest price surge could have mixed implications for Nigeria. While higher crude prices may increase the country’s export earnings and improve government revenues, they could also raise the cost of imported refined petroleum products, worsen inflationary pressures and increase the burden on fuel consumers if domestic supply remains insufficient.
SOURCE: PUNCH NEWS PAPER
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